Yusuf Abdulla Yusuf Akbar Alireza v. Richard Samuel Elman

HCA 1381/2017

[2026] HKCFI 5335

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1381 OF 2017

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BETWEEN

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J U D G M E N T (2)

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Introduction

1.I refer to my Judgment handed down on 20 July 2026[1] (the “Judgment”).  I adopt the same terms and abbreviations used therein.

2.For reasons set out in the Judgment, I found that P had proven his case against D2 on contract.  I have also proposed or made two sets of orders nisi (“Orders Nisi on Interest” and “Orders Nisi on Costs”).  I refer in those regards to §261 of the Judgment.  For reasons set out in §§262 and 263 of the Judgment, I granted parties liberty to file written submissions on the following issues: (1) the currency for the sums in which the judgment should be entered (the “Currency Issue”), (2) the Orders Nisi on Interest (the “Interest Issues”), and (3) the Orders Nisi on Costs (the “Cost Issues”).

3.Mr Westbrook has since filed his main written submissions and reply of respectively 10 August and 7 September 2026 (“P/Sub#1” and “P/Sub#2”).  Mr Manzoni has also filed his written submissions of 24 August 2026 (“D2/Sub”).  I have read them.

The Currency Issue

4.Parties are no longer in dispute as to the currency of the judgment.  P will accept judgment be entered in the Hong Kong dollar amounts as set out in §§261(b)(i) and 261(c)(i) of the Judgment, and D2 has no dispute in that regard.  I so order.

The Interest Issues

5.Whilst Mr Westbrook submits that P would have, given his experience in investing, achieved a return better than prime plus 1%, he accepts that the Orders Nisi on Interest are correct both in terms of the dates and rates proposed.  D2 does not dispute that.  I order that the Orders Nisi on Interest (as set out in §§261(b)(ii) and 261(c)(ii) of the Judgment) shall from the date hereof become absolute.

The Costs Issue

CN/1

6.As can be seen from §261(d), I have made 2 Orders Nisi on Costs, one on the costs of and occasioned by the proceedings against D2 (§261(d)(i), “CN/1”), and one on the costs of and occasioned by the proceedings against D1 (§261(d)(ii), “CN/2”).

7.Parties have raised no issue in respect of CN/1.  I order that CN/1 (as set out in §261(d)(i) of the Judgment) shall from the date hereof become absolute.

CN/2

8.Whilst parties do not agree on CN/2, the difference is narrow, as explained below.

9.When P first initiated the present proceedings in June 2017, D1 was named as the first defendant.  

10.For reasons which I will come back to, by summons of 4 August 2022, P sought an order to discontinue the proceedings against D1 (the “Discontinuation Summons”).  On 26 September 2022, Master Gary C C Lam (as he then was) allowed the application and ordered D1’s costs be paid by P to be taxed if not agreed.  D1’s legal representatives (“Deacons”) sought costs in the total sum of HK$957,227.33.  After negotiations between Deacons and Gall, P and D1 on 23 April 2023 agreed upon the sum of HK$600,000, which was settled on about 28 April 2023 (via the release from court of part of the security for costs which P had previously paid into court).

11.Mr Westbrook has in P/Sub#1 made some detailed submissions as to why it was reasonable on P’s part to initially sue D1 together with D2.  There is no need for me to go into those details, as D2 accepts, in the light of this Court’s findings at §168 of the Judgment, that “it may have been reasonable for P to join D1 as a defendant at the commencement of the proceedings.”[2] In my view, the concession is correctly made.  I hold that it was indeed reasonable for P to have done so.

12.Parties have also made submissions on the nature of and the power of this Court to make a Sanderson order or Bullock order.  Again, there is no need for me to go into the details.  Given the fact that P had in fact paid D1 its costs in the agreed sum of HK$600,000, P is seeking in effect a Bullock order.  §31 of P/Sub#1 is in these terms: “… D2 should be ordered to indemnify P for the costs paid to D1 and for P’s own costs against D1”.  D2 also accepts that “it is open to the Court to entertain a Bullock order.”[3]

13.The dispute between the parties is how much of the HK$600,000 which P had paid D1, and how much of the costs that P had himself incurred for the part of his claim against D1, that D2 should be ordered to bear.  In gist, Mr Manzoni submits that the 5-year delay in discontinuing against D1 necessarily caused a significant increase in costs, which D2 should not be made to bear.  He submits hence that the Bullock order should be capped at 10%.  He submits that the same can also be said about P’s own costs incurred against D1.

14.The difference between the parties on CN/2 is now confined to the percentage of D2’s indemnity.  Realistically, the issue turns on whether P ought to have discontinued against D1 as soon as its original Defence was filed back in October 2017, or whether it was more reasonable for P to wait till August 2022 when P took out the Discontinuation Summons.

15.I have set out in the Judgment in detail the terms of the Deed of Agreement.  I have also set out in detail the contemporaneous correspondence and conduct between and of the parties.  Given those facts and background, it must have come as a surprise to P when he read D1’s original Defence claiming that D2 “is not a director of [D1] and had no authority or legal capacity to execute or sign any document on behalf of [D1]” (§9) … “in particular in relation to the [Deed of Agreement]” (§7), and that it is a “trustee of the Chater Holding Trust” (§6).  I repeat in this regard also §199(a) of the Judgment setting out the factual findings on the Misrepresentation Issue which I would have made if necessary. Bearing in mind also the limited amount of discovery at the early stage of the proceedings, I accept P’s submissions made in P/Sub#2 that it was prudent for P to await the exchange of witness statements. 

16.On 4 November 2021, D1 filed Mr William Malcolm Patterson’s witness statement.  Therein, Mr Patterson said:

4.  [D1] had no knowledge of the purported Deed of Agreement prior to the institution of this action.  [D1] saw the purported Deed of Agreement for the first time when a copy of it was supplied to Deacons, [D1’s] solicitors, [RSRB], [D2’s] then solicitors, on 6^th October 2017 in response to a request made of them pursuant to RHC Order 24 Rules 10 and 11A.

…

6.  The purported Deed of Agreement purports to have been signed or executed on behalf of [D1] by [D2].  [D2] was not and has never been a director of [D1].  [D2] had no authority or legal capacity to execute or sign any document, including the purported Deed of Agreement, on behalf of [D1].

7.  The purported Deed of Agreement was never executed and/or delivered as a deed by [D1].  Hence, it does not and cannot bind [D1] whether as a deed or a contract. In any event, it is unenforceable as against [D1].

17.P then obtained his counsel’s advice on merits.  P also served a Notice to Admit facts on 14 June 2022 (“NOA”) requiring D2 to admit certain facts along the lines as stated by Mr Patterson in the above quoted paragraphs of his witness statement.  In the meantime, on 13 June 2022, Deacons issued a letter notifying P of D1’s intention to strike out P’s claim.  On 24 June 2022, D2 responded to the NOA.  Then, in August 2022, P issued the Discontinuation Summons.

18.On the facts of the case, and given the procedural history, I form the view that P had acted reasonably in not discontinuing his claim against D1 until August 2022.

19.There had been some protracted discussions between D1 and P on costs after the order to discontinue.  On the materials before me, I cannot say that those discussions took longer than what were reasonable.  In any event, P managed to negotiate the amount down from the HK$957,227.33 which D1 originally sought to HK$600,000.

20.On the facts, I accede to P’s request in relation to CN/2.  I vary CN/2 from what it was to what I set out in §22(d) below.

No order as to further costs

21.I note that it was P who originally sought judgment in a currency other than Hong Kong dollar, which position he no longer presses.  I note P is on the other hand the successful party in relation to CN/2.  I note the overall not unreasonable stances parties have taken in relation to these rounds of submissions.  Noting all these, and in the exercise of my discretion, I order that there be no further order as to costs in respect of these submissions as directed by me in §263 of the Judgment.

The Judgment resulting

22.I accordingly enter final judgment (for avoidance of doubt, to be dated the date of this Judgment (2), as on 20 July 2026 when the Judgment was handed down, the currency of the final judgment had not been fully dealt with, so that 20 July 2026 cannot be adopted as the date of the final judgment) in favor of P in the following terms:

(a)  D2 do pay P the sum of HK$402,278,854 together with interest thereon at the rate of prime plus 1% from 1 February 2015 to the date of this Judgment and thereafter at judgment rate until payment;

(b)  D2 do pay P the sum of HK$47,623,900 together with interest thereon at the rate of prime plus 1% from 31 December 2016 to the date of this Judgment and thereafter at judgment rate until payment;

(c)  Costs of and occasioned by the proceedings against D2 (including all costs reserved, but for the avoidance of doubt excluding the costs of and occasioned by the written submissions as directed by §263 of the Judgment of 20 July 2026 in respect of which there shall be no order as to costs) with a certificate for two counsel be paid by the D2 to P, to be taxed if not agreed;

(d)  D2 shall indemnity and pay P for:

(i)  the costs P has paid D1 in the sum of HK$600,000, and

(ii)  P’s own costs against D1, including any costs reserved, with a certificate for two counsel, to be taxed if not agreed.

Submissions and Reply by Mr Simon Westbrook SC leading Mr Toby Brown, instructed by Gall, for the Plaintiff

Submissions by Mr Charles Manzoni SC leading Mr Justin Ho and Ms Celeste Chan, instructed by MinterEllison LLP, for the 2^nd Defendant

[1]  [2026] HKCFI 4060.

[2]  §8 of D2/Sub.

[3]  Also §8 of D2/Sub.