World Fuel Services (Singapore) Pte Ltd t/a Trans-tec Asia v. The Owners of the Ship or Vessel "M.V. Liberty Container"

cacv 327/2005

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 327 of 2005

(on appeal from HCAJ NO. 135 of 2003)

BETWEEN

Before: Hon Rogers VP, Le Pichon JA and Chung J in Court

Date of Hearing: 21 June 2006

Date of Judgment: 21 June 2006

Date of Handing Down Reasons for Judgment: 11 July 2006

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REASONS FOR JUDGMENT

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Hon Rogers VP:

1.This was an application for leave to appeal to the Court of Final Appeal under the provisions of section 22(1)(b) of the Court of Final Appeal Ordinance on the basis that the questions said to arise in the appeal by reason of their great general or public importance ought to be submitted to the Court for decision.  The “or otherwise” limb of that section was also relied upon.  At the conclusion of the hearing of this appeal, this court dismissed the application with costs with reasons to be given in writing.

2.The questions which were submitted were as follows:

(1) Whether a party which has provided funding permitting another party to defend a claim, thereby causing the plaintiff to incur costs which would not otherwise have been incurred, should be required to contribute to the successful plaintiff's costs if the defence is unsuccessful.

(2) Whether the principle stated by the Judicial Committee of the Privy Counsel in Dymock’s Franchise Systems (NSW) Pty Ltd v Todd and others [2004] 1 WLR 2807 at 2815F-G and 2817H, namely

(i) that, when a person not merely funds proceedings but substantially controls or at any rate is to benefit from them, justice will ordinary require that, if the proceedings fail, he will pay the successful party’s costs, and

(ii) that, generally speaking, where a non-party promotes and funds proceedings by an insolvent company solely or substantially for his own financial benefit, he should be liable for the costs if the claim or defence or appeal fails

are applicable in Hong Kong or whether by reason of the enactment of section 265(5B) of the Companies Ordinance (Cap. 32), some other legal principle applies in Hong Kong in relation to the appropriate order for costs consequent on the failure of the funded claim or defence in such circumstances.

3.The short point in answer to these questions is simply that on the basis of the analysis of this court in the reasons for judgment handed down on 26 April 2006 these questions do not arise.  The matter was analysed in the reasons for judgment and in particular reference can be made to paragraph 21 thereof.  As is set out there, the minutes of the meeting of the committee of inspection dated 23 October 2003 do not mean that the litigation would be conducted at Florens’ expenses.  Nor do they mean that Florens’ was in control of the litigation.  This court held that the suggestion that there had been any improper conduct on the part of the solicitor’s firm as, apparently, found favour with the judge, was simply groundless.  Nowhere does this court disagree with the judgment in the Dymock’s case.  In those circumstances the questions posed in the application are academic.

Hon Le Pichon JA:

4.I agree.

Hon Chung J:

5.I agree.

Mr Colin Wright & Ms Shannon Leung, instructed by Messrs Johnson, Stokes & Master, for the Plaintiffs/Applicants

Mr Clifford Smith SC, instructed by Messrs Holman, Fenwick & Willan, for the Interveners/Respondents

Plaintiff's application for leave to appeal to Court of Final Appeal granted by Court of Final Appeal. Please refer to FAMV24/2006 dated 26 October 2006