First Laser Ltd v. Fujian Enterprises (Holdings) Co Ltd and Another
Read the full judgment text of CACV 126/2008 on BabelCite. This Court of Appeal judgment was delivered on 14 June 2011 before Cheung JA, Yeung JA, Yuen JA.
Civil procedure – costs – appeal and trial costs – partial success on appeal – costs follow the event with deprivation for misconduct or abandoned defences. The plaintiff, First Laser Limited, sued the defendants, Fujian Enterprises (Holdings) Company Limited and Jian An Investment Limited, on a contract concerning the transfer of 51% of FCL to the plaintiff. The defendants raised a defence of lack of authority of the persons who signed the contract, causing the plaintiff to open its case and call its main witness for cross-examination on this issue; the defence was abandoned only when defence counsel opened the case. The defendants also raised defences denying agreement to transfer 51% of FCL and asserting uncertainty of the subject matter. The trial judge found for the defendants. On appeal, the Court of Appeal set aside the trial judgment and remitted the issue of restitution for determination, granting the plaintiff leave to appeal to the Court of Final Appeal on the 'as of right' ground subject to payment of $400,000 into court. Whether the defendants should be deprived of part of their costs below despite having succeeded at trial – Yes; the defendants were deprived of 45% of their costs below for unnecessarily prolonging the trial by relying on the abandoned authority defence and for failing on the transfer and uncertainty defences, entitling them to only 55% of their costs below. Whether the defendants' costs of the appeal should be subject to any deduction – No; the defendants were entitled to their full costs of the appeal because the appeal was substantially argued on the conflict of law issues on which they succeeded. Whether the defendants should be granted a certificate for three counsel – No; two counsel were sufficient to advance the defendants' case on the appeal, notwithstanding the difficult questions of law involved.
Legal issues: Costs of the trial below following partial success on appeal · Costs of the appeal · Certificate for three counsel on the appeal
Outcome: The defendants were deprived of 45% of their costs below and entitled to only 55%. The defendants were granted their full costs of the appeal. The certificate for counsel was granted for two counsel only.
Cited by 12 cases
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CACV 126/2008 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO. 126 OF 2008 (ON APPEAL FROM HCA 4414 OF 2001) ________________________ BETWEEN
________________________ Before : Hon Cheung, Yeung and Yuen JJA in Court Date of Hearing : 23 May 2011 Date of Decision : 23 May 2011 Date of Decision on Costs : 14 June 2011 ________________________ DECISION ON COSTS ________________________ Hon Cheung JA (giving Decision on Costs of the Court) : Orders made on 23 May 2011 1.On 23 May 2011, this Court made the following orders : (1) We granted leave to the plaintiff to appeal against our judgment of 4 January 2011 to the Court of Final Appeal on the ‘as of right’ ground which was not objected to by the defendants. We imposed the condition of payment into court of $400,000 within 21 days. Costs of the application were ordered to be in the cause of the final appeal. (2) We ordered by consent that the money paid into Court is to remain in Court until the determination of the final appeal and that the costs relating to the application to be in the cause of the final appeal. (3) We refused with costs the plaintiff’s application for leave to appeal against our interlocutory judgment of 8 July 2010 to the Court of Final Appeal. We did not consider that the plaintiff had satisfied the ‘or otherwise’ ground which was the sole basis advanced for its application. Costs 2.We now deal with the plaintiff’s application to vary the costs order of the appeal and below. 3.We will address the costs below first. In our judgment of 4 January 2011 we set aside the judgment of To J and ordered the issue of restitution to be remitted for determination. 4.Although the plaintiff had pleaded an alternative claim for the restitution of the money paid under the contract, it did not receive by our judgment what it had asked for because the repayment of the contract sum is subject to possible restitution by the plaintiff to the defendants of the benefits it had received under the contract which have yet to be determined. Hence this is not a case of the plaintiff succeeding at the trial below. On the contrary it was the defendants who had succeeded below. 5.However, we are of the view that the defendants should be deprived of part of their costs below by reason of two matters. First, it had unnecessarily prolonged the trial by relying (which was later abandoned) on the defence of the lack of authority of the persons who signed the contract on their behalf. The plaintiff had to open its case and called evidence with its main witness being cross-examined on this issue. The abandonment only came when counsel for the defendants opened the case. Counsel informed the court that the defendants would not be calling evidence. Witness statements were exchanged. Substantial costs had been incurred and wasted. Second, the defendants failed in their defence that they had not agreed to transfer 51% of FCL to the plaintiff. They also failed in their defence on the issue of the uncertainty of the subject matter of the contract. While we do not consider that the defendants should be ordered to pay part of the costs of the trial to the plaintiff, we are of the view that the defendant should be deprived of 45% of the costs below. Hence we will order that the defendants will only be entitled to 55% of the costs below. 6.As for the costs of the appeal, we are of the view that the defendants should have their costs without any deduction. The appeal was substantially argued on the conflict of law issues on which the defendants succeeded before us. Certificate for counsel 7.The defendants asked for certificate for three counsel for the appeal. The plaintiff was represented by two counsel. Two counsel were instructed below by both sides. While we agree that the appeal raised difficult questions of law, we are of the view that it was sufficient for two counsel to be instructed to advance the defendants’ case.
Mr. Chan Chi Hung SC and Mr. Jeremy S K Chan, instructed by Messrs Mayer Brown JSM, for the Plaintiff Mr. Paul Shieh SC and Mr. Law Man Chung, instructed by Messrs Paul, Hastings, Janofsky & Walker, for the 1st and 2nd Defendants |
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