Jonathan Peter Warnett v. Corporation Link Ltd and Others

HCA2698/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2698 OF 2008

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BETWEEN

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Before : Hon Suffiad J in Chambers

Date of Written Submissions on Costs : 21 August 2009

Date of Ruling on Costs : 1 September 2009

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RULING   ON   COSTS

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1.A Judgment in written form given in this matter was handed down on 7 August 2009.

2.This Ruling on Costs relates to that Judgment and has to be read in conjunction with that Judgment which dealt with two matters, namely, setting aside a default judgment and also variation to the terms of the Mareva injunction obtained by the plaintiff.

3.This Ruling on Costs pertains to both those matters.

Costs in relation to setting aside default judgment

4.The 3^rd defendant succeeded in setting aside the default judgment obtained against it by the plaintiff on the grounds that the default judgment obtained was irregular in that the Writ had not been properly served on the 3^rd defendant at its registered office.

5.Moreover, such defective service of the Writ was through no fault of the 3^rd defendant.

6.On that basis, costs of the application to set aside the default judgment ought to follow the event.

7.The plaintiff contends, however, that he should not have to bear the costs of the application to set aside the default judgment on the basis that the general rule that costs should follow the event ought to be departed from.

8.The plaintiff submits that the reason for departing from that general rule was that after the 3^rd defendant had discovered that its account with the Bank of China had been frozen (by the Mareva injunction) towards the end of December 2008, the 3^rd defendant or its solicitors failed to contact the plaintiff’s solicitors until 6 February 2009, after judgment in default had been entered on 21 January 2009.

9.It is the plaintiff’s contention that had the 3^rd defendant contacted the plaintiff’s solicitors when the 3^rd defendant first became aware of their account with Bank of China being frozen, and had given an explanation as to how the plaintiff’s money had ended up in the 3^rd defendant’s bank account, judgment in default would not have been applied for.

10.I am unable to accept that contention of the plaintiff by reason of the fact that even after the 3^rd defendant’s solicitors had made contact with the plaintiff’s solicitors in early February 2009, the plaintiff still maintained that the Writ had been properly served on the 3^rd defendant and that the default judgment was not obtained irregularly. That stance was maintained by the plaintiff in the 2^nd Affidavit of Jonathan Peter Warnett as late as 21 May 2009.

11.Even at the hearing, although the plaintiff accepted that the default judgment was irregular and should be set aside, it was still contended by the plaintiff that the default judgment should only be set aside on terms.

12.In the circumstances, I see no reason why costs should not follow the event.

13.There will accordingly be an order that the plaintiff pays the costs of the application to set aside the default judgment to the 3^rd defendant.

14.In this respect I also make a gross sum assessment of HK$60,000 being the costs of the application to set aside the default judgment which is to be paid forthwith to the 3^rd defendant.

Costs in relation to variation of Mareva injunction

15.The 3^rd defendant did not succeed in discharging the Mareva injunction. It also did not succeed in getting the cap amount of the Mareva injunction reduced to only the amount that was paid by the plaintiff into the bank account of the 3^rd defendant.

16.However, the cap amount of the Mareva injunction was reduced to US$256,670 due to the fact that the plaintiff had, in the interim, managed to recoup from the 1^st defendant’s bank account some money by way of enforcement proceedings, thereby reducing the total amount of his claim.

17.The 3^rd defendant also succeeded in varying the terms of the Mareva injunction to make provisions for its business and legal expenses.

18.Given the above circumstances, the fairest costs order to make is that the costs of both parties relating to the application to vary and/or discharge the Mareva injunction be costs in the cause.

19.Such a costs order would also be in line with general principles relating to costs in respect of interlocutory injunctions.

Mr Edward Alder, instructed by Messrs Robertsons, for the Plaintiff

Mr Jonathan Cheng, instructed by Messrs Wilkinson & Grist, for the 3^rd Defendant