Tw Recovery Ltd (in Creditors’ Voluntary Liquidation) and Others v. Best Leader Precious Metals Ltd and Others

CACV 369/2023, [2026] HKCA 1797

On Appeal From [2023] HKCFI 2124

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 369 OF 2023

(ON APPEAL FROM HCA NO 102 OF 2023)

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DECISION ON COSTS

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Hon G Lam JA (giving the Decision on Costs of the Court):

1.By our judgment dated 2 March 2026 in the 1^st plaintiff’s appeal, brought with leave of the judge below, we allowed the appeal and made an order nisi that the 8^th, 9^th and 10^th defendants (“D8”, “D9” and “D10” respectively) do pay the original plaintiffs’ (now the 2^nd and 3^rd plaintiffs) costs below and the original plaintiffs’ and the 1^st plaintiff’s costs of the appeal and summons for leave to appeal, with a certificate for two counsel.  These defendants have since each issued an application by summons for variation of that costs order.  This is our decision on their summonses.

2.The background and our reasons for allowing the appeal are set out in our judgment and will not be repeated here.  Suffice it to say that the judge held that there was a good arguable case that over 1,300 persons were victims of a fraudulent investment scheme and D8, D9 and D10 were involved in it, and that there was a real risk of dissipation of assets by these defendants.  The judge refused Mareva relief on the grounds that (1) a good arguable case in relation to the quantum of the investors’ claims had not been established, there being “no evidence at all” for assessing an appropriate cap; [1] and (2) there was material non-disclosure at the ex parte stage regarding the double actionability rule.

3.We allowed the appeal on the basis, broadly, that there was evidence providing a real basis informed by the circumstances of the case capable of justifying the Mareva injunctions with a lower ceiling than that sought from the judge, though the judge did not take account of that evidence.  We also rejected the allegation of material non-disclosure, given that there was no reason at the ex parte stage to think that the double actionability rule would be relevant, and the rule was in fact not raised in the defences subsequently filed. 

4.The variation sought by D8, D9 and D10 respectively are in substance identical, namely, an order that the 2^nd and 3^rd plaintiffs (i.e. the original plaintiffs before Cheng J) pay their costs below.  Specifically, in the case of D8 and D10, these are the costs of and occasioned by the 2^nd and 3^rd plaintiffs’ summons dated 26 January 2023 for continuation of the Mareva injunction against them; in relation to D9, these are the costs of and occasioned by his summons dated 12 May 2023 for an order discharging the Mareva injunction against him.

5.The bases of their applications are in essence also identical.  They say that before the judge, the original plaintiffs sought Mareva relief with a ceiling of US$212.8m, without putting forward any alternative cap.  It was only on appeal that TWR, the new 1^st plaintiff, put forward the reduced ceiling figure of US$152.4m, based on which this court eventually granted Mareva injunctions up to the amount of US$150m.  The lower cap was a new point not taken before the judge.

6.To assess this argument it is relevant to recount the history of the matter.  Before the judge, none of the defendants specifically challenged the ceiling of US$212.8m adopted at the ex parte stage or raised any argument that Mareva relief should be discontinued because there was no good arguable case as regards the quantum of the investors’ claims, until D8 took the point in oral argument at the hearing.  Instead, the defendants argued that there was no good arguable case on liability against them, that the action could not properly be brought as a representative action, and that there was material non-disclosure by the plaintiffs in various respects including on the rule of double actionability. 

7.The defendants submit that the burden was on the plaintiffs to establish a good arguable case not only on liability but also in relation to quantum.  But the fact is that there was evidence that the plaintiffs did pay out and prima facie lose US$212.8m, and neither the parties nor the court would have focused on any mitigated losses until the point was raised by the defendants at the last minute.  Once the point was raised, had there been time to reflect at the hearing, the judge might have offered the plaintiffs an opportunity to recalculate the amount of the cap on the basis of the material already in evidence.  That was not done, and the judge concluded, erroneously in our view, that there was “no evidence at all to form the basis by which an appropriate ceiling for the Mareva can be assessed”.  The recalculation was done on appeal, but it was based on materials which the judge had.  There is no rule of law or practice that in these circumstances the defendants should have the costs below.

8.Moreover, as explained in our judgment, the defendants’ argument of material non-disclosure in relation to the double actionability rule, which was also raised at the eleventh hour before the judge, was a thoroughly bad one.  None of the defendants actually relied on the rule as a defence; yet none of them drew the judge’s attention to the defences filed.  The judge was erroneously led into refusing Mareva relief for that additional reason.

9.In all the circumstances we consider it just that D8, D9 and D10 should pay the costs below.  Their applications for variation are therefore dismissed.

10.D8, D9 and D10 have to pay the plaintiffs’ costs of the applications, each in the summarily assessed sum of $24,000.

Written submissions by Mr Jonathan Fung instructed by Messrs. Withers, for the Plaintiffs

Written submissions by Mr Thomas Wong instructed by Messrs. DLA Piper Hong Kong, for the 8^th Defendant

Written submissions by Mr James Man instructed by Messrs. So, Lung & Associates for the 9^th Defendant

Written submissions by Messrs. Stevenson, Wong & Co. for the 10^th Defendant

[1]  §56 of the judge’s decision.