Axa China Region Insurance Co. Ltd. and Others v. Pacific Century Insurance Co. Ltd. and Others

HCA009093C/2000

HCA 9093/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 9093 OF 2000

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Coram: Deputy High Court Judge To in Chambers

Date of Hearing: 10 January 2002

Date of Decision: 10 January 2002

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D E C I S I O N

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Background

1.On 24 July 2001, I granted an interlocutory injunction order against PCI and the Individual Defendants restraining them from disclosing, divulging or otherwise making use of AXA's Client Data and ordering them to deliver up certain documents containing Client Data and to make certain disclosures. On 8 August 2001, PCI filed an application for a stay pending appeal. The application for stay was set down before me for 15 minutes on 9 August 2001. At that hearing, I adjourned the application for argument and gave PCI extension of time until 30 September 2001 or the hearing of the application for stay, whichever the earlier. I indicated to PCI the need for urgency and that the intervening period of time between then and the hearing will be taken into account in any extension of time for compliance to be granted.

2.The hearing of the application was listed before me on 6 September 2001. Due to the very late production by PCI of "Points for Clarification" which AXA required time for consideration, the application was then adjourned to 6 November 2001 for further argument with one more day reserved. At the resumed hearing, I refused PCI's application for stay, but made some variation to the interlocutory injunction order and granted further extension of time for compliance. Written reasons for my decision was delivered on 16 November 2001. The issue of costs was reserved. The present hearing is to determine certain outstanding matters which the parties could not resolve among themselves and the issue of costs of PCI's application for stay and clarification.

Costs of hearing on 6 September 2001

3.I granted the interlocutory injunction order on 24 July 2001 and indicated to PCI the need for urgency in taking steps to comply with my order and that the intervening time between their application for stay and the hearing of the application will be taken into account in determining the extension of time to be granted. On the late afternoon of 4 September 2001, less than 48 hours before the hearing, PCI gave AXA 8 pages of "Points for Clarification" in draft. Then on the afternoon of 5 September 2001, PCI sent AXA an 11 page revised version of their "Points for Clarification". PCI's skeleton argument was only given to AXA's in-house lawyer just before the hearing on 6 September 2001.

4.The original application was an application for stay or extension of time. The clarification now tagged onto the application for stay has substantially changed the nature of the application. While Mr Fung SC was ready to proceed with the application on 6 September 2001, AXA naturally needed time to respond to the new matters raised and had to ask for an adjournment. In any event, the time reserved for hearing the application for stay would not be adequate for dealing with the "Points for Clarification." The interlocutory injunction was granted on 24 July 2001. PCI has been warned of the need for urgency in compliance with my order on 9 August 2001. Yet it was not until less than 48 hours of the hearing of the application for stay that clarification in draft form was first sought and PCI's skeleton argument was thrust onto AXA just before the hearing. If PCI were earnest in seeking clarification in order to enable compliance, they would have done so much earlier and not within less than 48 hours of the hearing of their application for stay. As I have indicated in my reasons for decision handed down on 16 November 2001, some of the scenarios raised by PCI are unreal and exaggerated and many have been satisfactorily answered. The delay in seeking clarification at the eleventh hour and the fact that many of the scenarios raised by PCI are unreal and exaggerated suggest to me that PCI was not at all earnest in complying with my order. PCI's conduct has put AXA in such a position as to make an adjournment inevitable. To mark the Court's disapproval of such conduct, it is appropriate that PCI shall pay AXA's costs of the adjournment on 6 September 2001 on an indemnity basis.

Costs of hearing on 6 to 8 November 2001

5.Some variation and clarification have been made. Mr Scott SC argues that PCI has obtained a significant measure of success and should not be penalised in costs. In my view, PCI was the major loser. It was unsuccessful in the application for stay. A substantial part of the variation and clarification sought has been obtained by agreement or satisfactorily answered. I have exempted Client Data in respect of ex-AXA policyholders who have joined PCI from the application of my order so that PCI may service their policies. This issue has not been raised by counsel on either side before. I have also amended the cut off date or the start date in paragraph 4(b), (c) and (d) of my order. Had PCI properly addressed me on the volume of the work involved at the hearing of the injunction in March or April last year, I would have set a less onerous start date. The amendment, I must say, was the result of indulgence on my part because I did not wish to make an order which cannot be complied with in view of the tight timing now left available by reason of PCI's delay. If costs have to be determined at this stage rather than deferred to the conclusion of the proceedings, I would consider PCI should pay AXA's costs of the application for stay and clarification including the costs of the hearing on 6 to 8 November 2001 and today.

6.In granting the interlocutory injunction on 24 July 2001, I made the unusual order that PCI shall pay AXA's costs because of the course adopted by PCI (see my reasons for decision handed down on 22 November 2001). Had PCI confined their defence within the American Cyanamid framework, costs in the cause would have been appropriate. Similarly, had PCI not sought a stay but only sought clarification and alteration, then it could be argued that the clarification and alteration were sought for the purpose of holding the ring and costs incurred should be in the cause. However, this is not the case. PCI sought a stay which turned out to be unsuccessful and achieved little success in seeking clarification and variation. The costs incurred were unnecessary. In the circumstances, I consider PCI should pay AXA's costs in any event and not in the cause. A discount of one-quarter of the costs of the hearing on 6 to 8 November 2001 only would be more than generous to give recognition to PCI's partial success.

Costs of hearing on 10 January 2002

7.The costs of the Plaintiffs' application and of the hearing on 10 January 2002 shall be awarded to the Plaintiffs in any event.

Conclusion

8.Accordingly, I order that the costs of and occasioned by the 1st Defendant's summons dated 7 August 2001, including the costs of the hearing on 9 August 2001 and 6 to 8 November 2001 be to the Plaintiffs in any event, with certificate for two counsel, save that the Plaintiffs shall only be entitled to 75% of their costs of the hearing on 6 to 8 November 2001 and that the costs of the hearing on 6 September 2001 be to the Plaintiffs to be taxed on an indemnity basis with certificate for two counsel.

9.The costs of and occasioned by the Plaintiffs' application and of the hearing on 10 January 2002 be to the Plaintiffs in any event, with certificate for two counsel.

Representation:

Mr R G Kotewall, SC and Mr Stewart Wong, instructed by Messrs Herbert Smith, for the Plaintiffs

Mr John Scott, SC, Mr David Stokes and Mr Ling Chun Wai, instructed by Messrs Richards Butler, for the 1st Defendant