Moulin Global Eyecare Holdings Ltd (in Liquidation) and Others v. Kpmg (A Firm)

HCA 118/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 118 OF 2007

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BETWEEN

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Before: Hon Barma J in Chambers

Date of Hearing: 25 February 2010

Date of Ruling: 8 June 2010

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RULING ON COSTS

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1.On 10 February 2010, I gave judgment in relation to applications by the Defendants in these proceedings by which they sought further and better particulars and discovery from the Plaintiffs.

2.The outcome in relation to the matters argued at the hearing was that so far as the requests for further and better particulars were concerned, the Defendants were broadly successful, in that I decided that the requests pursued by them went to matters that were properly matters of particularisation of the Plaintiffs’ case, and that the Plaintiffs should provide certain particulars as indicated in my judgment.  So far as the discovery application was concerned, however, the Plaintiffs were, in my view, the substantially successful party, in that in relation to the two main categories of documents of which discovery was sought, discovery was refused, while in relation to a third item, which was dealt with quite briefly, I required the Plaintiffs to confirm whether or not the document in question was in their possession, custody or control by virtue of being in the custody of the Plaintiffs’ liquidators in their capacity as such.

3.However, a substantial portion of the Defendants’ application for discovery was not proceeded with, in the light of information supplied by the Plaintiffs or indications that further discovery might be provided.  Moreover, much of the evidence filed in relation to the applications dealt with both applications, as did a part of the submissions at the hearing on 21 December 2009, as Mr Lam S.C., appearing for the Defendants, helpfully took me through the pleadings with a view to assisting in an appreciation of the Plaintiffs’ case, a matter which was of relevance to both applications.  I therefore directed that the question of costs should be dealt with by oral submissions at the hearing on 25 February 2010, when a further application for discovery, this time by the Plaintiffs, was before me for argument.

4.Mr Jat. S.C., for the Plaintiffs, suggested that so far as the discovery application was concerned, the Plaintiffs had been largely successful in relation to the matters that were actually argued.  He recognised, however, that a substantial number of the items originally pursued were not argued as a result of their having been dealt with voluntarily by the Plaintiffs.  He suggested that a fair order might be for the costs of the hearing in relation to discovery to be awarded to his clients, while the balance of the costs of the application should be in the cause.  As for the application for particulars, Mr Jat suggested that although orders had been made against his clients, the Plaintiffs had in fact agreed to produce the bulk of the information sought (albeit by way of evidence rather than particulars), and the Defendants had been truly successful only in relation to one out of four broad categories of particulars requested.  In these circumstances, he suggested that an appropriate order might be costs in the cause, or perhaps the Defendants’ costs in the cause.

5.However, recognising (as did Mr Lam) that it would be a difficult task on taxation to try to separate out the costs attributable to the separate applications, given the way in which the evidence and the submissions (to a large extent) dealt with both applications, Mr Jat indicated that a possibly more convenient approach would be to deal with the matter globally, in which case he suggested that his clients should be awarded about half the costs of the hearing, with the remainder of the costs being in the cause.

6.Mr Lam also accepted that there might be advantages in dealing with the matter globally, but differed from Mr Jat as to who was the substantially successful party, and as to the costs order that should be made.  Mr Lam said that the Defendants had been substantially successful in relation to the particulars application, as orders had been made in relation to all the particulars sought (although in one or two respects not quite as extensive as the requests), and should therefore have the costs of that application.  So far as discovery was concerned, he suggested that in the light of the fact that the Plaintiffs had voluntarily agreed to provide some further discovery or information, rendering it unnecessary to pursue a large part of the application, the fact that the Defendants had failed in respect of the two main requests that were argued should not be held against them, and that the appropriate order as to costs for the discovery application would be no order as to costs.  Overall, if the matter were approached globally, Mr Lam suggested that an order like that proposed by Mr Jat, but going the other way, so that his clients, the Defendants, should recover half the costs of the hearing, with the balance of the costs of the applications being in the cause would be appropriate.

7.Having regard to the overlap in the evidence and submissions, it seems to me that it would be more convenient to make a single order in relation to the applications, notwithstanding that there were two separate applications.  This will avoid leaving the taxing master with what is likely to be the extremely difficult task of having to separate out the costs properly attributable to the two applications.

8.Adopting that approach, it remains necessary to consider which party was successful in relation to each application, and what overall costs order would best reflect the outcome.  In my view, the Defendants were clearly substantially the more successful in relation to the application for particulars.  The particulars sought were resisted by the Plaintiffs as a matter of principle, contending that they were matters of evidence and not particularisation, and in this they were unsuccessful.  So far as the discovery application is concerned, however, the Plaintiffs were clearly the more successful in relation to the items argued at the hearing, although it is fair to note that most of the items sought did not need to be argued as a result of the Plaintiff volunteering to take steps to deal with the Defendants’ concerns as to discovery.

9.Looked at overall, I am of the view that the outcome of the matters argued at the hearing was that the parties were approximately equally successful. I therefore think that there should be no order as to the costs of the hearing, and that the balance of the costs of the applications should be in the cause.

Mr. Jat Sew-Tong, SC instructed by Messrs Clifford chance for the Plaintiff

Mr. Grodfrey Lam, SC instructed by Messrs Barlow Lyde & Gilbert for the Defendants