Re Labour Buildings Ltd

cacv 37/2010

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 37 of 2010

(on appeal from HCCW NO. 721 of 2009)

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

Date of Hearing: 26 April 2010

Date of Decision: 26 April 2010

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D E C I S I O N

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Hon Rogers VP:

1.This is an application by the Respondent to this appeal that the costs which have been awarded should, first of all, be summarily assessed and, secondly, that they should be payable by the solicitor for the Appellant.

2.The brief facts are that Harris J gave judgment immediately in the matter on 29 January of this year.  There is a great deal of background to this case which I do not intend to dwell upon.  It is well documented in various judgments both of this Court and in the court below, as a result of which, the submissions by Mr Fung, on behalf of the Respondent, were that the Appellant’s solicitor in this case strained every nerve to avoid the sale of the property which was the subject of the proceedings before Harris J.

3.For the purposes of this judgment, I do not consider it is necessary to go into that.  The simple fact is that a notice of appeal was filed on behalf of the Company and there is every reason to believe that the Company has no funds at all.  The notice of appeal was filed on 12 February.  There was no call upon the solicitor to file that notice of appeal.  An appeal is a separate matter from the proceedings and if the Company were to ask the solicitor to file that notice of appeal, it is the solicitor’s responsibility to see where the costs are coming from, not only his own costs but, of course, the costs of the other side, should it fail.

4.Mr Chan, who has argued his own case on his own behalf this morning, has indicated that he had no idea where any funds for the appeal would come from.  It was purely speculative that funds might be available from some source or another which, of course, it would be impossible to identify.

5.On 12 March, the appeal was set down and the date was fixed.  On 15 March there was a formal notice of the date of the hearing.  Mr Chan’s firm asked for an adjournment on 19 March and again on 22 March and that was refused.  When the appeal came to be heard on 1 April, a skeleton argument dealing both with the facts and the law had been filed by the Appellant’s firm, but no counsel appeared.  Mr Chan says that he had attempted to find counsel.  It seems to have been a rather forlorn attempt because, at the same time as attempting to instruct counsel, it appears, from his own affidavit, that he was informing the counsel that they may not get paid because the Company was in the process of being wound up.

6.That is not a basis upon which solicitors should attempt to instruct counsel.  If solicitors want to instruct counsel, they must make sure that they can pay counsel.  They cannot ask counsel to appear on a speculative basis that they may or may not get paid.  What is worse is to instruct counsel that they may get paid if they are successful and obtain an order for costs and, if they do not and are unsuccessful, no costs will be forthcoming and they will not get paid.  That would be a wholly improper way of attempting to instruct counsel.

7.Be that as it may, the simple point in this case is that this appeal was launched.  In my view, it was a hopeless appeal from the start.  The notice of appeal is perfunctory and raises no real ground of appeal at all.  The façade was kept up, right until the hearing commenced, that it was an appeal which would go ahead.  Mr Chan, who is the proprietor of the solicitors’ firm acting on behalf of the Applicant, well knew it was not going ahead and costs could clearly have been saved, even if the appeal were abandoned towards the end.

8.In my view, these are circumstances which clearly dictate that this appeal should never have come before this Court and, in my view, the Appellant’s solicitors have acted improperly in the conduct of this appeal and should bear the costs of it because, clearly, the Appellant (the Company) is not in a position to pay those costs and I would so order.

9.As regards the amount of the costs, the skeleton bill has been put before us and, in my view, the appropriate order would be a rounded figure of $600,000 as an immediate taxation.

Hon Le Pichon JA:

10.I agree.

Hon Stone J:

11.I also agree.

Mr Patrick Fung SC and Mr Lee Tung-ming, instructed by Messrs Zebra H Y Kwan & Partners, for the Applicant/Respondent (Star Rainbow Investments Limited)

Mr David W T Chan, of Messrs David W T Chan & Co., for the Company/Appellant (Labour Buildings Limited)