Siegfried Adalbert Unruh v. Hans-joerg Seeberger and Another

FACV Nos. 9 & 10 of 2006

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NOs. 9 & 10 OF 2006 (Civil)

(ON APPEAL FROM CACV Nos. 297 & 298 of 2004)

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Between:

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Court:  Chief Justice Li , Mr Justice Bokhary PJ, Mr Justice Chan PJ, Mr Justice Ribeiro PJ and Mr Justice McHugh NPJ

Date Judgment handed down :  9 March 2007

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JUDGMENT ON COSTS

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Chief Justice Li:

1.The judgment of the Court on costs will be delivered by Mr Justice Ribeiro PJ.

Mr Justice Ribeiro PJ:

2.On 9 February 2007, the Court dismissed Mr Seeberger’s appeal and allowed Egana’s appeal.  Costs orders nisi were made for Mr Seeberger to pay Mr Unruh’s costs and for the latter to pay Egana’s costs here and below, with the parties given liberty to file submissions on costs. 

3.Mr Unruh has filed submissions contending that the order in respect of Egana should be varied so that Egana is required to pay his costs in this Court, although it is recognized that he should pay Egana’s costs at first instance and in the Court of Appeal.

4.The basis of this submission is a Calderbank letter in which Mr Unruh proposed that if Mr Seeberger should drop his appeal, agree to an order for payment out to Mr Unruh of the judgment sums then in court, and pay Mr Unruh’s costs; he would agree to Egana’s appeal being allowed by consent or alternatively (if the Court was not prepared to go along with that suggestion) to undertake not to enforce the judgment against Egana or to agree to a permanent stay of execution, with Mr Unruh paying Egana’s costs of the proceedings below.

5.Mr Seeberger and Egana both rejected that proposal and Mr Unruh submits that since, in the end, Egana achieved no more than it could have achieved by its acceptance of the Calderbank offer, it should have to pay Mr Unruh’s costs in this Court.

6.We are not persuaded by this argument.  Although it is stated that Mr Seeberger held almost 40% of the issued shares in Egana at the time of the without prejudice offer, Egana is a public company and obviously an entity quite separate from Mr Seeberger.  They each had their own interests to consult and were separately represented throughout.   

7.As was rightly accepted on Mr Unruh’s behalf, the Court does not generally allow appeals by consent, but requires to be satisfied that the judgment below was erroneous before that judgment is set aside.  Accordingly, an order simply allowing Egana’s appeal by consent was most unlikely to be forthcoming.  Egana was therefore being asked to accept the continued existence on the record of the adverse judgments of the Court of First Instance and the Court of Appeal on a permanent basis, subject only to Mr Unruh’s undertaking not to enforce them or to his consenting to a permanent stay of execution.  It was perfectly reasonable for Egana, a public company, to regard that proposal as unacceptable and to pursue its appeal with a view to having those judgments expunged.  Moreover, the offer in favour of Egana was made conditional on Mr Seeberger’s agreement to drop his own appeal, a matter which Egana could not be expected to control.  Egana can hardly be penalised in costs because Mr Seeberger chose to pursue a course dictated by his own interests so that there was in any event no basis for Egana accepting the offer put forward. 

8.Mr Unruh chose to add Egana as a party to his action against Mr Seeberger (as an afterthought decided upon some 16 months after issuing the writ against Mr Seeberger) on grounds which have been shown to be misconceived.  There is no basis for him to escape paying Egana’s costs and the costs orders nisi are accordingly made absolute.