Tobrix B.V. (A Company Incorporated in the Netherlands) v. Hongkong Tripod Ltd

DCCJ 291/2021

[2025] HKDC 1682

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 291 OF 2021

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BETWEEN

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DECISION

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1.After an 8-day trial that ended on 17 May 2024, I delivered [2024] HKDC 2124, being my judgment on liability and quantum in this action (“Judgment”). Unless otherwise stated I shall continue to use the terminology that I had set out in the Judgment.

2.This is my decision in relation to the following:

(a) The following 3 summonses:

(i) The defendant’s summons filed on 21 January 2025 for leave to appeal against the Judgment (“Leave Summons”);

(ii) The plaintiff’s summons filed on 14 January 2025 to vary the costs order nisi in the Judgment (“Costs Variation Summons”); and

(iii) The plaintiff’s summons filed on 17 January 2025 seeking payment out to the plaintiff of HK$600,000 that it had paid in as security for costs (“the Security”), together with all accrued interest (“Release Summons”)[1];

(collectively, “the 3 Summonses”)

The 3 Summonses were meant to be heard before me in Court on 8 May 2025. However, and in circumstances which I will set out below in dealing with the Adjournment Costs Issue, I ordered on the defendant’s paper application that such hearing be adjourned to a date to be fixed, before (pursuant to further submissions and evidence from the parties) eventually ordering that the summonses be dealt with on paper with the parties having leave to lodge and exchange supplemental written submissions on the 3 Summonses, the intended New Evidence Application (defined below), and the Adjournment Costs Issues; and

(b) the issue of costs of, arising out of, and incidental to the defendant’s paper application for adjournment of the hearing on 8 May 2025 (“Adjournment Costs Issue”).

3.For reasons below I have, in considering the Leave Application, also considered the defendant’s intended application for leave to adduce new evidence (“New Evidence Application”), as can be discerned from the defendant’s submissions in support of the Leave Summons. The relevant evidence in question is a decision dated 28 May 2024 of the Intermediate People’s Court of Dongguan City, Guangdong Province, in respect of the appeal by Wendy Wu (“Criminal Appeal Decision”). I have also addressed the defendant’s request for a stay of execution, as contained only in the defendant’s submissions in support of its Leave Application.

4.As a matter of context, on 11 February 2025 the defendant filed a summons seeking an order that the execution of the Judgment be stayed pending disposal of the defendant’s appeal, and other ancillary relief relating thereto, including a stay in relation to the release of the Security (“Stay of Execution Summons”). The Stay of Execution Summons was determined, after a hearing, by Deputy District Judge Isaac Chan in [2025] HKDC 404 (“Stay Decision”) dated 10 March 2025. As the condition imposed by the learned Deputy District Judge’s order in relation to the Stay Decision[2] was not fulfilled, I consider that the Stay of Execution Summons was hence dismissed with costs to the plaintiff, to be summarily assessed if not agreed.

Leave Summons and intended New Evidence Application

5.Leave to appeal should only be granted where the appeal has reasonable prospects of success or where there is some other reason in the interests of justice why it should be heard: s 63A(2) District Court Ordinance (Cap 336). Moreover:

(a) The applicant bears the burden of satisfying me that the appeal has a reasonable prospect of success (which means an appeal with prospects that are more than fanciful but which do not need to be shown to be probable);

(b) Where a judgment turns on an issue of fact, the Court of Appeal must have regard to the nature of that issue of fact, and to the advantages (sometimes broad and sometimes subtle) enjoyed by a trial judge who received the evidence on such issue first-hand. If the Court of Appeal is satisfied (notwithstanding that it does not enjoy such advantages) that the conclusion on the facts is plainly wrong, then it should intervene. But if it is not satisfied, it should defer to the trial judge’s conclusion even if in some doubt as to its correctness (Ting Kwok Keung v Tam Dick Yuen & ors (2002) 5 HKCFAR 336 at §§41-42).

(c) Under the “plainly wrong” test, the court has to be satisfied that the trial judge had fallen into palpable error in his finding of fact, such as where the finding was one (i) which there was no evidence to support (ii) which was based on a misunderstanding of the evidence (iii) which failed to appreciate the effect of the evidence (iv) overlooked some documentary or other indisputable evidence which should have compelled him to a different conclusion; or (v) the conclusion was one which no reasonable judge could have reached. The threshold faced by the appellant is high (Coomber, Peter John v Wong King Wah (Mr) [2024] HKCA 440 at §12, Siu Chiu Choi v Teng Hung Ping & ors [2024] HKCA 1069 at §25). I have borne all such matters in mind where I refer to the test below.

6.As for the admission of new evidence on appeal, normally such must satisfy the three criteria in Ladd v Marshall [1954] 1 WLR 1489. However, in this case it appears to me that the new evidence on which the defendant seeks to rely, namely the Criminal Appeal Decision, is “evidence as to matters which have occurred after the date of the trial or hearing”. Hence the relevant principles are not those in Ladd v Marshall, supra, but rather those relating to that bracketed portion of RHC O 59 r. 10(2), as explained in HKCP 2025 §§59/10/8(ii), and 59/10/13 and the cases cited therein, particularly Cheung Wing Kuen Samuel v Ip Chiu Sum [2022] 3 HKLRD 709 at §§40-44. For the sake of concision, I will not repeat those principles here, and will instead apply them below.

7.Procedurally, an application for leave to adduce new evidence cannot be entertained until after leave to appeal has been granted and it is a matter for the Court of Appeal in deciding whether the new evidence should be admitted. Hence I should, in processing the Leave Summons, examine if there is a reasonable argument that the new evidence satisfies the relevant criteria above. If these criteria are not satisfied, such evidence should be disregarded for the purpose of the Leave Summons (Man Lin Heung v 梁根 & anor [2019] HKCA 846 at §§2-3, FN1 and FN2, which approach I apply mutatis mutandi in relation to“evidence as to matters which have occurred after the date of the trial of hearing”).

8.As observed in the Stay Decision, the defendant’s three brief grounds of appeal as set out in the Leave Summons were as follows:

“1. The first-instance court erred by misinterpreting the defendant’s intention to enter into a sales contract with the plaintiff.” (“Ground 1”)

“2. The defendant’s actions, although imperfect, were ratified by the plaintiff and should not be construed as establishing a seller relationship.” (“Ground 2”)

“3. Any determination of a sales contract should be limited to specific transactions and not extended to the KY order, where the defendant acted solely as an agent per the plaintiff’s instructions.” (“Ground 3”)

9.An affirmation of Mr. Bults in support of the Leave Summons was also dated and filed on 21 January 2025 (“Leave Affirmation”), and contains some matters relating to Grounds 1 to 3.

10.As also recorded in the Stay Decision (see paragraphs 17 to 22), one hour before the hearing of the Stay of Execution Summons the defendant attempted to adduce, by way of written submission and apparently in support of the Stay of Execution Summons, the Criminal Appeal Decision. The attempt to do so was rejected on the basis of the plaintiff’s solicitor’s submissions which had referred to Ladd v Marshall, supra.

11.Since then, the parties have filed further submissions in relation to the Leave Application (including in relation to the New Evidence Application), including pursuant to my directions relating to paper disposal of the 3 Summonses.

12.The defendant has also raised several other arguments in its written submissions which do not appear to feature in or relate to Grounds 1 to 3. No application has been made to amend the Leave Summons to include or reflect such arguments. Nevertheless, I have dealt with them in this decision, particularly as most have been addressed by the plaintiff in its submissions.

13.In summary I do not, for reasons below, see that the intended New Evidence Application, Grounds 1 to 3, the Leave Affirmation, and/or the defendant’s other arguments raised within its written submissions, have any reasonable prospect of success or give rise to some other reason in the appeal should be heard in the interests of justice.

14.As a matter of context, I had in the Judgment set out the parties’ relevant cases as to the contractual terms[3], and the principles relating to assessing credibility[4], formation of contract (including as to the objective test), agency, the importance of contemporaneous evidence, and on the drawing of inferences[5]. I considered and assessed the underlying evidence[6] and set out my observations and findings pursuant to such, including as to the alleged existence of the Hank Sourcing Agreement, the Lunch Agreement, and as to the pleaded terms of the agreement between the parties, having regard to the context of the 1^st to 7^th Orders[7] and events in stages[8] up until and including the early hours of 22 March 2020 (including the 1^st Order)[9], and then to later events until 28 August 2020 (including in relation to OneDrive access, and on events relating to all of the 1^st to 7^th Orders, including the parties’ dealings regarding the quality of masks in relation to the 1^st Order)[10].

15.I then, having borne in mind the aforesaid matters, made findings as to the terms of the contract entered into between the parties[11]. In doing so, I rejected the defendant’s case that there was a Hank Sourcing Agreement, that the Service Agreement was entered into in the pleaded terms, and in particular that Hank was an agent of the plaintiff in entering into or performing certain pleaded obligations under the Service Agreement, and that the defendant acted as an agent of the plaintiff in entering into contracts with Manufacturers/Suppliers thereunder. I also found that the evidence was on-balance more consistent with the framework and terms of a buyer-seller relationship, and the relevant terms thereof.

16.Turning to the merits of the intended New Evidence Application, applying the principles in HKCP 2025 §§59/10/13, supra, and Cheung Wing Kuen Samuel, supra, I do not consider that it is reasonably arguable that the Criminal Appeal Decision would be admitted.

17.As a matter of context, the first instance criminal decision regarding Wendy Wu was in the trial bundles[12] and was referred to in Mr. Bults’ Supplemental Witness Statement (which he adopted as evidence) dated 18 October 2023. While the Criminal Appeal Decision was dated 28 May 2024 (which was shortly after the trial had concluded), it was only in the defendant’s submissions lodged on 28 April (“D’s 1^st Leave Subs”) and 3 July 2025[13] (“D’s 2^nd Leave Subs”), and not in the Leave Summons or Leave Affirmation, that the defendant suggested it should be allowed to rely on the Criminal Appeal Decision in support of the following arguments, which have been contained only in those submissions:

(a) There was common law frustration due to the “supervening illegality” of “falsification” of test reports and criminal production of substandard marks, which rendered “performance impossible”, such that this “frustrating event” discharged the defendant’s obligations under “the contract” (without specifying how and whether that relates and operates as to the Agreement or the Services Agreement, as were pleaded by the parties) (“Frustration Argument”); and

(b) The Criminal Appeal Decision:

(i) and “further details of the crime disclosed” demonstrate that the plaintiff’s losses stem from KY’s fraud and not the defendant’s conduct[14]; and

(ii) “demands re-examination” as the “fraud was undetectable” by “ordinary due diligence” due to its “sophistication” and “destroys [plaintiff’s] Quality Allegations; the very basis of the product’s representation was vitiated by criminal deception” and (with reference to a message from Toine on 31 March 2020) “Exonerates [defendant’s] Due Diligence: [defendant] reasonably relied on [plaintiff’s] assurances”[15] (“Blame Argument(s)”).

18.The first and main issue with the intended New Evidence Application is that, contrary to the requirements in RDC O. 18 rr 8 and 12, no such issues or facts relevant to the Frustration Argument or the Blame Argument(s) were or have been pleaded by the defendant. Indeed I had, for similar reasons, refused to consider submissions which appear to be similar to portions of the Blame Argument(s) (insofar as it/they can be understood) at Judgment Paragraphs 158(1) and 172[16]. There is no reason I would have approached the matter differently in relation to the Frustration Argument or the Blame Argument, given not only those requirements (as to which see also HKCP 2025 §18/12/11 citing Wang Ruiyun v Gem Global Yield Fund Ltd [2011] 3 HKLRD 785 (CA)), but also given the highly fact-sensitive nature of both arguments, in particular as to frustration which is not to be lightly invoked (see Master Yield Ltd v Ho Foon Yung Anesis & anor. [2013] 6 HKC 520 at §§34, 36; Stal Matthew Ian v Brilliant Jet Ltd [2025] HKCFI 2013 at §§35-35.2).

19.I therefore do not see how the availability of the Criminal Appeal Decision in evidence would have substantially affected any basic assumptions, or foundations, at trial (cf. Cheung Wing Kuen Samuel, supra, at §§43(4), 47).

20.Further, and having considered the principles and approach in Cheung Wing Kuen Samuel, supra, at §§43(1) to (4), 48, I also do not see how the Criminal Appeal Decision would be relevant to any potential appeal, or that it would be an affront to one’s sense of fairness not to admit it, when:

(a) Insofar as the defendant seeks to advance both arguments with reliance on the Criminal Appeal Decision, it has not applied to amend its pleadings or its grounds of appeal (let alone offered a draft formulation of either or both) to properly do so, or advanced any acceptable explanation for its failure to do so;

(b) In any event, and more fundamentally, on the present state of the evidence (including de bene esse consideration of the contents of the Criminal Appeal Decision), and despite having had regard to Stal Matthew Ian, supra, at §§36-39, Chitty on Contracts, 35^th Edition §§27-024 to 27-032 and (as cited by the defendant) Li Ching Wing v Xuan Yi Xiong [2004] 1 HKLRD 754 at §9, I do not see that the defendant has any reasonably arguable case of “supervening illegality” and attendant frustration, let alone one that is relevant to its intended appeal, or that would vitiate my conclusions reached as to the contract between the parties;

(c) It is far from clear what is/are the legal basis/bases/principle(s) engaged by the Blame Argument(s), or indeed what specific facts are relevant to, and why they constitute a basis for, the Blame Argument. I do not see the relevance of the cited portion of Hedley Byrne v Heller, supra[17]. Nor is it clear who is said to have made the alleged “product’s representation”, what that amounts to, what has been vitiated and how and to what effect, how and why the fraud was allegedly “undetectable” (including why that is relevant and to what legal principle), what “Quality Allegations” have therefore been “destroyed”, and how any alleged “exoneration” by the defendant (even if established) is relevant[18]. I hence cannot discern, and reject the notion that there is, any reasonable arguable case from the Blame Argument(s);

(d) Given the aforesaid, I cannot see how it could be in any way just or equitable, particularly given the need for finality, to allow the Applicant to rely on the Criminal Appeal Decision to ventilate either argument on appeal. A fortiori when given the fact-sensitive nature of both apparent arguments, I do not see that the Applicant has a reasonable prospect of establishing on appeal that either of them surmount the “state of the evidence” bar as set out in Flywin Co Ltd v Strong & Associates Ltd (2002) 5 HKCFAR 356 at §§38-39 (see Cheung Wing Kuen Samuel, supra, at §§43(1) to (4), 48; Master Yield, supra; Chan Chi Wai v Chan Sau Wah [2019] 3 HKLRD 330 at §§15, 26-37, 34-36).

21.I will hence disregard the Criminal Appeal Decision from my consideration of the merits of the Leave Summons. I add that I would have reached the same conclusion even if it is the approach in Ladd v Marshall, supra, that applies, since given the aforesaid analysis I do not see how there is any reasonable argument that the Criminal Appeal Decision satisfies the second condition thereof.

22.Turning firstly to Ground 1, I do not see how that and the arguments advanced in relation to such are reasonably arguable, let alone that (as per the Leave Affirmation and the defendant’s submissions) I was “plainly wrong” (or indeed erred in law) to find, as a matter of fact, that the defendant acted as a seller:

(a) As outlined above, in the Judgment I had set out the relevant tests applied, and assessed in detail the relevant context and evidence (including that Hank and Toine were brothers, and discussions leading up to the Lunch Agreement), and made findings relating to the nature of the relationship between the parties, including in particular the nature of Hank and Toine’s relationship. See in particular paragraphs 26, 62, 67 to 82, and 92 to 106 within the relevant Sections of the Judgment.

(b) I also do not see how any of the arguments on Ground 1 as advanced in the Leave Affirmation, or the defendant’s other submissions, are reasonably arguable[19]. I not see how Ground 1 is assisted by its attempt to rely on its subjective intention not to act as a seller. The arguments also blithely ignore the aforesaid principles, assessments, and findings in the Judgment, particularly those in relation to the existence and context of matters leading up to and including the Lunch Agreement, the (lack of the) Hank Sourcing Agreement, the dealings in relation to each of the 1^st to 7^th Orders, and the OneDrive[20]. I do not see that such arguments raise any reasonable prospect that on appeal it will be found that I was “plainly wrong”.

(c) The defendant has also raised some arguments under the heading of “Mischaracterisation of the role of Hank”[21], “Evidence Hank Acted for Plaintiff”, and “Plaintiff’s repeated confirmations and defendant’s exclusion from decision-making”[22]. Given my analysis in the Judgment and above, I do not see that they raise, whether in and of themselves and/or in relation to Ground 1, a reasonable prospect of the defendant establishing on appeal that I was “plainly wrong” (or for that matter erred in law) in concluding as I did in the Judgment regarding my findings as to the Lunch Agreement and the lack of the Hank Sourcing Agreement, and hence as to Hank’s role, much less the nature of the relationship between Hank, the plaintiff, and the defendant. Indeed, I had in the Judgment dealt with such matters having regard to the relevant context and evidence, see in particular Paragraphs 24 to 34, and 66 to 126[23].

23.Grounds 2 and 3 are also similarly devoid of merit and are not reasonably arguable.

24.Dealing firstly with Ground 2, this (insofar as can be understood from the Leave Affirmation and the defendant’s submissions) effectively amounts to an allegation that there was, on the evidence, an agency, and not a buyer-seller, relationship as:

(a) Even if some “actions” or “imperfections” (being the phrases it has used in its various submissions) were not consistent with the defendant’s status as an agent, this was because the plaintiff did not set out “strict standards for performance of agency actions”, so the actions/imperfections should not be used to infer a buyer-seller relationship (“Ground 2.1 Argument”); and

(b) The plaintiff ratified such “actions” and/or “imperfections” as agency actions[24], and/or there was hence an agency “relationship” (whereby the defendant’s “role” was as agent for the plaintiff)[25] (“Ground 2.2 Argument”).

25.I do not see that there is a reasonable prospect of the defendant successfully establishing Ground 2 on appeal, such that I was “plainly wrong” in ultimately rejecting, at Judgment Paragraphs 152 to 153, the defendant’s pleaded case that there was an agency relationship created in terms of the Services Agreement:

(a) Here, the defendant has not apparently suggested that I erred in my summary of the parties’ cases at trial and the relevant principles (in particular as to assessing credibility, the objective test, relevant forms of agency, and the importance of contemporaneous evidence especially in relation to agency) ^[26]. I see no reasonable argument that I erred in applying those principles to consideration of the context and evidence before me[27], and in making findings in relation to the question of the defendant’s alleged agency, based on the relevant evidence before me as to actions taken by the parties, particularly when:

(i) the exact nature and extent of the parties’ relevant relationships had to be discerned and adjudged pursuant to scrutiny of the evidence as a whole before me; and

(ii) I had in doing so reached conclusions, as based on the evidence and submissions, that there was no Hank Sourcing Agreement, that there was the oral Lunch Agreement, and as to matters such as who had made the material decisions, OneDrive access[28], and the sharing of information.

(b) As for the Ground 2.2 Argument, I see no prospect of the defendant successfully establishing such on appeal, as apparently based on either or both of the 2 messages identified by the defendant only in D’s 2^nd Leave Subs:

(i) Given the contents and context of the message from Toine on 31 March 2020[29], I do not see that this amounted (as the defendant now claims) to “Acceptance of Goods Without Objection” “Despite defects”. Given both that, and further and in any case the analysis and my conclusions in the Judgment on matters leading up to and around that point in time, I do not see any reasonable argument that there were earlier alleged agency actions, role, or relationship that were somehow “ratified”, let alone how this message could “ratify” such and/or negate the suggestion that the defendant acted as a seller.

(ii) As for the message dated 13 April 2020 from Hank, I had addressed and summarised its contents in Paragraph 137 of the Judgment[30], as part of a section concerning the “Handling of complaints re: masks delivered pursuant to the 1st Order, including instruction of T&C and W&H law firms” (Paragraphs 133 to 149 within Section VI.4), which must be read in context with my analysis and findings in the earlier sections. Given the analysis and my conclusions in the Judgment on matters leading up to and around that point in time, I see no reasonable argument that there were earlier alleged agency actions, role, or relationship that were somehow “ratified” by this message, let alone how the message could “ratify” such and/or negate the suggestion that the defendant acted as a seller.

(c) I also do not see how Walton Stores (Interstate) v. Maher (1988) 1864 CLR 387 at 395-397, 411, 462-463 is apparently relevant to or assists Ground 2[31]. That authority concerns estoppel, which has never been pleaded or advanced by the defendant (cf. RDC O. 18 r 8 and HKCP 2025 §18/8/15). In any case, given the matters above, I also do not see any reasonable argument that (as claimed by the defendant) the plaintiff’s “actions led to a reasonable belief in the existence of an agency relationship, which the plaintiff cannot later refute”.

(d) There is, accordingly, also no basis for suggesting that Ground 2, whether its own, and/or in the context of the Ground 2.1 and/or Ground 2.2 Arguments, raises any reasonable prospect that on appeal it will be found that I was “plainly wrong” in reaching the findings that I did as regards the allegation of agency and the nature of the parties’ relationship in terms of the Services Agreement.

26.As for Ground 3, the attempt to draw a distinction between the 1^st Order and the subsequent orders is also devoid of merit:

(a) It is, again, not apparently suggested that or how I erred in my summary of the parties’ cases at trial and the relevant principles;

(b) Ground 3 ignores that the analysis and findings of fact contained in the Judgment as conducted pursuant to such summary and principles, particularly those (such as those on the Lunch Agreement and the Hank Sourcing Agreement) leading up to and including the placing of the 1^st Order in the evening of 21 March 2020[32], and further analysis and findings of fact on matters relevant to the 1^st Order, such as information on the OneDrive and the handling of complaints relating to it[33]. I see no reasonable argument for suggesting that I had erred, let alone was “plainly wrong” in relation to such.

(c) Moreover, the defendant has never pleaded or run an alternative case that the 1^st Order should have been treated differently from the others. This is despite it being trite that parties need to put forward the entirety of their respective cases (including fallback or alternative cases) in their pleadings[34]. There was no basis for such points to be taken at trial given the provisions of RDC O. 18 r. 8. Further, and in any event, the defendant confirmed at trial that its case was that the Service Agreement was agreed on the evening of 21 March 2020 and applied in relation to all of the 1^st to 7^th Orders (see Judgment, Paragraphs 16 to 20, 51 to 57). There is hence no reasonable argument that I erred in my approach, or that the conclusions reached were “plainly wrong”. Nor has the defendant explained why it should be allowed to run such an alternative, unpleaded case, and how it can surmount the “state of the evidence” bar as explained in Flywin, supra. I also do not see how the cited portions of Walton Stores, supra, assist any argument based on Ground 3.

27.Apart from Grounds 1 to 3 the defendant had also, again only by way of its written submissions and not in the Leave Summons or Leave Affirmation:

(a) Alleged procedural unfairness by claiming that “The Court reclassified the relationship as seller-buyer without notice, depriving [the defendant] of the opportunity to debate and argue SOGO’s proper applicability”[35]; and

(b) Advanced some arguments based on the notion that I had somehow misapplied ss. 16(2)(a) to (c), and 16(3) of SOGO, apparently as the defendant now claims that by reason of the provisos thereto there was a “waiver” by the plaintiff of the implied warranties under SOGO[36], and also raises various allegations that the plaintiff lacked good faith, engaged in misrepresentation, and caused its own loss and/or failed to mitigate loss[37].

28.These arguments, whether considered separately or together, do not give rise to any argument on appeal with a reasonable prospect of success. Nor is there any other reason in the interests of justice why they should be heard:

(a) The issue of whether the plaintiff and the defendant were in a buyer-seller relationship (as alleged by the plaintiff), or a principal-agent relationship (as alleged by the defendant), was clearly canvassed in these proceedings as early as the parties’ original pleadings. The same goes for the plaintiff’s claim that goods supplied to it under the Agreement were to be of merchantable quality and be reasonably fit for the purpose for which they were purchased, and that there were breaches of such (see e.g. also Joint Statement of Issues 1, 2, and 6 as referred to in Paragraph 19).

(b) Again, it is trite that parties need to put forward the entirety of their respective cases (including fallback or alternative cases) in their pleadings. As regards the defendant, this clearly included any fallback or alternative pleas necessary to “debate and argue” the “proper applicability” of SOGO, and/or establish reliance on the provisos in s. 16(2) and (3) SOGO, which clearly should have been pleaded given RDC O. 18 rr. 8, 12, and 12A.

(c) However, the defendant did not raise any such pleas, despite having had ample opportunity to do so, and even though it had been legally represented until at least late 2023. Nor was there any order that the nature of the parties’ relationship be tried as a preliminary issue, or that there be a split trial. As there was no basis for such points to be taken at trial, there is no reasonable argument that there was any procedural unfairness, let alone any basis to suggest that I had “reclassified the relationship as seller-buyer without notice”. A fortiori when the parties had ample opportunity to, and did, adduce supporting evidence and make oral and written submissions on[38] the relevant pleaded issues, including most notably whether (as set out in the pleadings) their relationship was a buyer-seller relationship, or a principal-agent relationship (see in particular Judgment Paragraphs 13 to 19, 51 to 59, 65).

(d) The defendant also did not plead any of the issues (or facts relating to such) that it now raises in the form of lack of good faith, misrepresentation, or loss and mitigation. This is, again in breach of RDC O. 18 rr. 8 and 12, see also HKCP 2025 §§18/12/11, 18/12/12, 18/12/28. As there was no basis for such points to be taken at trial, there is no basis to suggest that I erred in refusing to do so, or hence that these mean my conclusions were “plainly wrong”. Indeed, I had (as explained above) for similar reasons rejected an attempt to take points similar to those raised in relation to loss and mitigation, at Judgment paragraphs 158 and 172(1).

(e) In any event, and again, the defendant has not explained why it is fair that the defendant should be allowed to run any of these alternative, unpleaded cases on appeal. I do not see that it has established any prospect of surmounting the “state of the evidence” bar as explained in Flywin, supra.

Stay of execution

29.The defendant, by way of D’s 1^st Leave Subs and without a summons or supporting affirmation asks, yet again, for a stay of execution pending appeal, apparently on the basis of the merits of its appeal.

30.I do not (for reasons given above) see any arguable grounds of appeal. Hence, and even putting aside procedural criticism of the request/application, applying the principles summarised in paragraph 5 of the Stay Decision there is no good reason for me, and I hence refuse, to grant the defendant’s request for a stay of execution pending appeal.

Release Summons

31.The plaintiff, as the successful party at trial, is prima facie entitled to the release of the Security, and (as correctly mentioned in the last sentence of paragraph 9 of the Stay Decision) should not be deprived of the use of the Security without good reason after having obtained the Judgment.

32.The defendant did not make any submissions, or place any evidence, before me in relation to the Release Summons. With that said, I do not, even considering the reasons apparently relied on by the defendant in the Stay Decision (which Mr. Rompotis fairly drew to my attention), see that the defendant has discharged its onus to give me a good reason why the Security, and interest thereon, should remain in court. This is particularly so given the nature of the Security, that there is no stay of execution, that the proposed appeal is unmeritorious, and when I do not consider that this is a situation where the evidence sufficiently establishes that the plaintiff is prone to not abiding by the procedures of the court (see HKK v N [2020] HKCFI 1888 at §§12-14, and John Joseph McGee v Nold (HK) Limited & Ors [2023] HKCFI 409 at §§13-14).

Costs Variation Summons

33.In short, the plaintiff seeks to vary the costs order nisi such that its costs of the action (including all costs previously reserved or ordered to be in the cause) be paid by the defendant on an indemnity basis, or from such date as the court deems fit.

34.In support of its application, the plaintiff says that the defendant’s conduct has been unreasonable from the outset, including an unreasonable refusal to mediate or engage in settlement discussions before action. The plaintiff also relies on how the defendant has refused three settlement offers made on 19 November 2021, 18 October 2023, or 28 October 2023, which it says were all ultimately beaten by the sums awarded in the Judgment. Given the latter, the plaintiff submits that it should be awarded indemnity costs at least from 19 November 2021, or another date deemed appropriate.

35.The defendant has not made any submissions, or filed any evidence, in relation to the Costs Variation Summons. It also has not raised any objection to the plaintiff’s English translations of the Dutch documents exhibited to the plaintiff’s evidence.

36.On the basis of the evidence before me and the authorities, I consider that this is an appropriate case for me to vary the costs order nisi in the Judgment by providing that the plaintiff’s costs of the action (including all costs previously reserved or ordered to be in the cause) be taxed on a common fund basis. This is for the following reasons.

37.Firstly, on the evidence before me from October 2020[39], I find that the defendant refused to mediate. I also find that the defendant has not discharged its burden to provide a reasonable explanation for its refusal to mediate, and that I should take this unreasonable failure to engage in mediation into account when exercising my discretion as to costs (Practice Direction 31 §4, 5(2); Golden Eagle International (Group) Ltd v GB Investment Holdings Ltd [2010] 3 HKLRD 273 at §§34-37, 43-46). However, I would only award such costs on a common fund basis as was done by Johnson Lam J. (as Lam PJ was then) in Golden Eagle, supra, as I do not see that an indemnity costs order from such stage is (as suggested by the plaintiff) justified in this case either by the general pro-mediation approach of the courts, or the English approach set out in the cited decision of Reid v Buckinghamshire Healthcare NHS Trust [2015] EWHC B21 (Costs).

38.Secondly, even assuming (as submitted by the plaintiff) both that the plaintiff has come out better than the contents of all of the offers to which I have been referred, and that they should be treated as Calderbank offers, I do not see that I should award costs on an indemnity basis. Rather, I consider that in the circumstances the common fund basis should continue to apply. This is because:

(a) The proper approach is to ask whether the offeree ought reasonably to have accepted the offer, at the time it was made. If the offer was reasonable, and the defendant goes to trial having rejected it, the defendant may be liable to a higher level of costs if they do not do better than the rejected offer, but it is a matter of discretion to be exercised in light of the surrounding circumstances. The mere failure to beat a Calderbank offer[40] does not necessarily justify costs being awarded on an indemnity basis. Much turns on the circumstances of each case, which the court must ascertain to see if there are circumstances out of the norm so as to justify an award of indemnity costs. (Choi Tak Man v Chan Yuk Lan Didi [2017] 5 HKLRD 619 at §§24-30; Fang Meng Sung John v Luk Man Lok Rocky [2019] HKCFI 2530 at §§16-18; Fong Chak Kwan v Ascentic Ltd [2022] HKCFI at §§35-38).

(b) I have had regard to all of the circumstances of this case, including the position above as regards mediation, the principles above, and the plaintiff’s submissions on concessions as recorded at Judgment paragraph 183. In the round, I do not see that the offers and the other circumstances justify me exercising my discretion to award costs on an indemnity basis at any point from 19 November 2021 onward. In particular, I do not think that it has been established that the defendant ought reasonably to have accepted the offers at the time they were made as:

(i) The first offer of EUR403,314 was made early in the proceedings on 19 November 2021, at a stage when, putting aside the Retained MOA[41], the plaintiff’s pleaded claims for the other amounts were quantified as “To be assessed”, the plaintiff did not (in the offer) refer to specific documentation to support the underlying figures, and witness statements had yet to be exchanged;

(ii) While witness statements had been exchanged by the time of the second offer and its expiry[42], at the time those other claims were still pleaded as “To be assessed” even though there was no order for a split trial and the upcoming original trial dates were less than a month away[43], and the plaintiff had not filed underlying supporting evidence on such matters, nor apparently indicated that the position would change; and

(iii) The plaintiff’s third offer of EUR385,000 (also including costs and interest) was made on Saturday 28 October 2023 and was to expire at 9:00am Hong Kong time on Monday 30 October 2023. The offer did indicate that the plaintiff would in the coming week seek to file a further witness statement and amend its pleadings, but did not explain that the amendments would amend and particularise such claims in the amount of EUR122,108.54[44] (out of which I awarded EUR120,942.76: see Judgment Paragraph 173, 180(b) and (c)), or that Toine 3 would contain and refer to related evidence and supporting documentation. By emails exchanged on 29 October 2023, the plaintiff revised the time for acceptance to 9:00am Hong Kong time on Tuesday 31 October 2023, but increased the amount to EUR392,500. While the plaintiff filed such applications on Monday 30 October 2023, they were only granted after argument at a hearing before me on 8 November 2023. Given such matters and bearing in mind the nature, scope, and implications of the proposed amendments and new contents, I do not consider that it can be said that the defendant ought to have reasonably accepted such third offer at the time of its original or revised making or deadline.

Costs of the 3 Summonses

39.In view of the aforesaid, there seems to be no reason why the plaintiff should not have its costs of and occasioned by the 3 Summonses (namely the Leave Summons, the Costs Variation Summons, and the Release Summons). Given that I have not been provided with relevant statements of costs, and also the stage of the proceedings, I will, below, make orders nisi that the defendant do pay the plaintiff’s costs (with certificate for counsel in relation to the Leave Summons) of and occasioned by the 3 Summonses, such costs to be taxed if not agreed.

Adjournment Costs Issue

40.On 30 April 2025, the defendant applied in writing, with the support of an affirmation of Mr. Bults, for an adjournment of the upcoming hearing of the 3 Summonses to a date no earlier than 1 September 2025 (in the affirmation) or 15 September 2025 (in its written submissions), and/or directions to dispose of the matter without a hearing. It did so based on claims relating to Mr. Bults’ health, in particular a condition with which he had been recently diagnosed with on 29 April 2025, “requiring urgent surgery on 5 May 2025” and the subsequent hospitalisation and recovery period of 7-10 days. The affirmation exhibited a medical certificate, a letter to the plaintiff seeking its consent to the adjournment, and stated that “due to the surgery and the recovery period [Mr. Bults would be] physically incapacitated and unable to… prepare adequately for the hearing [and to] attend the hearing in person”.

41.The plaintiff responded by way of a letter dated 2 May 2025 in which while it consented to a short adjournment of the hearing until the end of May, submitted that the exhibited medical certificate did not indicate that the surgery was urgent or medically necessary, pointed out that counsel had already been briefed for the hearing, and sought the plaintiff’s costs of the defendant’s application for adjournment, and the costs of and incidental to the adjournment.

42.Pursuant to such, I ordered inter alia that the 8 May 2025 hearing of the 3 Summonses be adjourned to a date to be fixed. I also gave related directions, including that the parties indicate availability on a range of dates in June and July 2025.

43.There was then further correspondence from the defendant dated 21 May 2025, and from the plaintiff dated 22 May 2025, in relation to the fixing of dates. In the former the defendant claimed, as explored in more detail below, that Mr. Bults would only be available on certain dates from September 2025 onward due to medical reasons, and in the latter the plaintiff took issue with the actual state of and evidence in relation to Mr. Bults’ health. Pursuant to such I handed down further directions on 28 May 2025 requiring inter alia that the defendant file and serve evidence relating to the claims made in relation to Mr. Bults’ health. I also required that the parties lodge and serve submissions as to the proposed future conduct of the 3 Summonses, including whether such could be dealt with by way of remote hearing, paper disposal, and setting out any directions sought.

44.On 10 June 2025 the defendant lodged submissions and filed an affirmation of Mr. Bults exhibiting further medical evidence and making further claims as to the state of his health, and indicating a preference for an oral hearing but agreement that the matter could be dealt with on paper. On 12 June 2025 the plaintiff filed submissions claiming that the adjournment was avoidable and unnecessary, and reiterating that it sought costs of and arising out of the adjournment (including exchanges between the parties and the court, and that such be paid on an indemnity basis forthwith), suggesting paper disposal of all outstanding matters, and consenting to the lodgment of supplemental submissions if any.

45.I hence on 17 June 2025 directed that the 3 Summonses, and the Adjournment Costs Issue, be dealt with on paper, and gave directions for lodging inter alia supplemental written submissions (if any) in relation thereto and the Adjournment Costs Issue, as well as a schedule from the defendant identifying relevant page and/or paragraph references in the 12 authorities which had been referred to in D’s 1^st Leave Subs (“D’s Schedule”). Eventually the defendant filed D’s Schedule out of time, and D’s 2^nd Leave Subs, which did not address the Adjournment Costs Issue.

46.I will award the plaintiff the costs of, arising out of, and incidental to the defendant’s application for adjournment of the hearing, which include costs of the exchanges between the parties and the court from 30 April 2025 to date. I will exercise my discretion to order that such costs after 3 May 2025 be taxed on a common fund basis to reflect the defendant’s unsatisfactory conduct which has unnecessarily burdened the court’s resources and caused prejudice and detriment to the plaintiff. In particular:

(a) The defendant’s response dated 21 May 2025 to the court’s attempts to find a substitute hearing date was vague, imprecise, and unsupported by any medical documentation[45];

(b) There was and is no medical evidence that the surgery had to be carried out urgently on 5 May 2025, before 8 May 2025, or that Mr. Bults had suffered some sort of immobility or disadvantage that would have prevented him from attending the hearing as originally scheduled on 8 May 2025;

(c) It was only revealed by the defendant’s submissions and Mr. Bults’ affirmation dated 9 June 2025 (which were filed pursuant to my directions dated 28 May 2025) that Mr. Bults had (pursuant to a second opinion he had obtained on 3 May 2025) rescheduled his surgery to take place at another hospital to which he was only admitted on 12 May 2025, and operated on 14 May 2025 – which rescheduling meant that the hearing could have originally proceeded as scheduled;

(d) The medical evidence so produced also did not support the claim made in the defendant’s submissions dated 21 May and 9 June 2025 that Mr. Bults’ post-operation condition rendered it impossible for him to attend a hearing for several months[46]. I agree with the plaintiff’s submissions that there has been an element of exaggeration in the presentation of Mr. Bults’ health condition[47]; and

(e) It is regrettable that the defendant did not see fit to update the parties and the court with relevant information and supporting documents, and relied on bare and exaggerated assertions in relation to the court’s attempts to find a substituted hearing date and in considering how to best deal with the 3 Summonses.

47.Given that I have not been provided with a statement of costs of the plaintiff, the outcome of the other matters above, and the present state of the proceedings, I consider that it is more appropriate for such costs to be dealt with by way of taxation.

Conclusion and Orders

48.For reasons above I make the following orders.

49.I dismiss the Leave Summons;

50.I grant an order in terms of Paragraphs 1 and 2 of the Release Summons.

51.In relation to the Costs Variation Summons, I order that my costs order nisi at Paragraph 184 of the Judgment be varied to the effect that the defendant do pay the plaintiff's costs of the action (including all costs previously reserved or ordered to be in the cause), such costs to be taxed if not agreed on a common fund basis, with certificate for two counsel for the trial of the action.

52.I order nisi that the defendant do pay the plaintiff’s costs of and occasioned by the Leave Summons, with certificate for counsel, such costs to be taxed if not agreed.

53.I order nisi that the defendant do pay the plaintiff’s costs of and occasioned by the Costs Variation Summons, such costs to be taxed if not agreed.

54.I order nisi that the defendant do pay the plaintiff’s costs of and occasioned by the Release Summons, such costs to be taxed if not agreed.

55.I order that the defendant do pay the plaintiff’s costs of, arising out of, and incidental to the defendant’s application for adjournment of the hearing (which includes costs of the exchanges between the parties and the court from 30 April 2025 to date), such costs to be taxed if not agreed on a party and party basis prior to 3 May 2025, and on a common fund basis from 3 May 2025.

Mr Philip Rompotis, instructed by Tanner De Witt, for the plaintiff, and written submissions from Tanner De Witt on the Adjournment Costs Issue

The defendant acting in person