Healthy Living Products International Ltd and Another v. Murray Alastair Elliot

CACV 50/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 50 OF 2011

(ON APPEAL FROM HCA NO. 1463 OF 2009)

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BETWEEN

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Before: Hon Fok JA and Bharwaney J in Court

Date of Hearing: 30 September 2011

Date of Handing Down Judgment: 11 October 2011

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J U D G M E N T

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Hon Fok JA:

Introduction

1.By his Decision dated 23 February 2011, Deputy High Court Judge L. Chan acceded to an application by the defendant, Alastair Elliot Murray (“Mr Murray”), to strike out the statement of claim, dismiss the action and vacate the registration of the amended writ of summons from the Land Registry.   He concluded this was the third time Mr Murray had been vexed by the same subject matter and that the action was an abuse of the court’s process.

2.This is the appeal by the 1^st and 2^nd plaintiffs, Healthy Living Products International Limited (“Healthy Living”) and Chan Yu Sang Zarrina (“Madam Chan”) respectively, against that Decision.

Background facts

The underlying property transaction

3.The action concerns a dispute in respect of a property, namely Lot No. 215 in Demarcation District 219, 56 Hing Keng Shek, Sai Kung, New Territories (“the Property”).

4.Healthy Living was the registered owner of the Property.  The directors of Healthy Living are Madam Chan and her son Jawid Iqbal Khan (“Mr Khan”).

5.By a provisional agreement dated 14 June 2003 (“the Provisional Agreement”), Healthy Living agreed to sell the Property to Mr Murray for HK$8,830,000. The Provisional Agreement was signed by Madam Chan and Mr Khan for Healthy Living.

6.On 26 June 2003, Madam Chan, acting on behalf of Healthy Living, signed a formal sale and purchase agreement with Mr Murray (“the Formal Agreement”).  Completion of the agreement was to take place on 25 August 2003.

7.It became evident that Healthy Living would prefer not to proceed with the transaction.  On 21 July 2003, Healthy Living’s solicitors informed Mr Murray’s solicitors of the existence of illegal structures in the Property but this did not deter Mr Murray from going ahead.

8.Then, on 6 August 2003, Healthy Living’s solicitors wrote to Mr Murray’s solicitors alleging that a company called Nu Life International Limited (“Nu Life International”) had paid the down payment and mortgage instalments for the purchase of the property by Healthy Living so that it was the beneficial owner of the Property.  Healthy Living’s solicitors suggested cancelling the Formal Agreement but Mr Murray refused to do so.

9.On 12 August 2003, another firm of solicitors, acting on behalf of a company called Nu Life International (Hong Kong) Limited (“Nu Life HK”), wrote to Mr Murray’s solicitors alleging that Nu Life HK had transferred money from time to time into Healthy Living’s account to meet the monthly mortgage instalments.  Hence, it was alleged, Nu Life HK had an equitable interest in the Property and objected to its sale to Mr Murray.

The 2003 Action

10.Healthy Living did not complete on 25 August 2003 and Mr Murray therefore issued proceedings against Healthy Living in HCA 3202/2203 (“the 2003 Action”) the following day.  Nu Life HK and Mr Khan were added as 2^nd and 3^rd defendants to that action on 7 November 2003.

11.The pleaded case of Healthy Living, Nu Life HK and Mr Khan in the First Action was that Nu Life HK was the beneficial owner of the Property and that Healthy Living was holding the Property on trust for Nu Life HK.

12.On 23 January 2006, shortly before the trial of the 2003 Action was due to commence, Healthy Living and Mr Khan sought to amend their defences and to file further evidence (including two medical reports of Dr Benjamin Lai, a psychiatrist, dated 3 January 2006 and 10 January 2006) to advance the argument that, when she signed the Provisional Agreement, Madam Chan had been the subject of duress and undue influence and that she was of unsound mind and not fit to give her consent when she signed the Provisional and Formal Agreements.

13.The trial judge, Deputy High Court Judge Gill, refused leave to amend and this was affirmed by the Court of Appeal (in CACV 40/2006) on 24 February 2006.

14.On 6 March 2006, the trial of the 2003 Action commenced.  Madam Chan, although not a party, made a witness statement on behalf of Healthy Living and gave oral evidence at the trial.

15.On 19 April 2006, Deputy Judge Gill gave judgment in the 2003 Action in favour of Mr Murray.  He found that Nu Life HK had no beneficial interest in the Property and ordered specific performance of the agreement for sale and purchase of the Property, with completion fixed for 30 May 2006, and damages.

16.On 11 May 2006, Healthy Living and Nu Life HK filed a notice of appeal against the judgment in the 2003 Action in CACV 168/2006.  However, this appeal was not pursued and was eventually dismissed by consent on 2 April 2007.

17.In the meantime, on 16 May 2006, Healthy Living and Nu Life HK applied for a stay of execution of the judgment in the 2003 Action but this was dismissed on 18 May 2006.

18.On 12 July 2006, Healthy Living applied in the 2003 Action for a declaration that the Formal Agreement had been validly annulled and an order to postpone completion until after the determination of HCA 1157/2006 (which I shall address below).  This application was dismissed on 19 July 2006.

19.On 2 August 2006, Healthy Living assigned the Property to Mr Murray. Madam Chan was one of the signatories on behalf of Healthy Living.

The 2006 Action

20.On 29 May 2006, the day before completion fixed under the judgment in the 2003 Action, Nu Life International issued proceedings against Healthy Living and Mr Murray in HCA 1157/2006 (“the 2006 Action”) claiming a beneficial interest in the Property.

21.Mr Murray applied to strike out the 2006 Action on the ground that it was frivolous or vexatious and/or an abuse of the process of the court.

22.By his judgment dated 12 September 2007, Deputy Judge Gill acceded to Mr Murray’s application and struck out the 2006 Action.  The Deputy Judge considered the close relationship amongst the two Nu Life companies, Healthy Living and Mr Khan and found that, in the 2003 Action, those in control of the two Nu Life companies, with the support of Healthy Living and Mr Khan, had embarked on a considered strategy to use Nu Life HK to claim a beneficial interest in the Property and deliberately chose not to have Nu Life International joined in the proceedings. 

The Present Proceedings

23.Healthy Living and Madam Chan commenced this action, HCA 1463/2009, on 23 June 2009 but it was only on 20 April 2010 that the statement of claim was filed.  The proceedings were not served on Mr Murray until after the amendment of the writ on 26 April 2010.

24.By this action, Healthy Living seeks a declaration that the Formal Agreement is invalid and unenforceable, a declaration that it had rescinded the Formal Agreement and damages for breach and repudiation of the Formal Agreement.  For her part, Madam Chan seeks damages for mental anxiety and the tort of intentional and/or reckless infliction of emotional distress.

25.The statement of claim is a lengthy and somewhat discursive pleading.  It is pleaded that the Property was purchased under Healthy Living’s name for Madam Chan’s family, the directors and shareholders of Nu Life International and Madam Chan and her daughter.

26.It is alleged that immediately before the signing of the Formal Agreement, Mr Murray was told through his wife that Madam Chan had no authority to sign the Formal Agreement singly on behalf of Healthy Living.  It is therefore pleaded that the Formal Agreement was not binding on Healthy Living.

27.It is further alleged that Mr Murray disregard an oral promise given to Madam Chan’s daughter on 21 June 2003 to back out from the transaction and, without waiting for the return of Mr Khan to participate in the matter, procured the registration of the Formal Agreement at the Land Registry.

28.Healthy Living and Madam Chan plead that, at the material time, Madam Chan was in frail physical condition and did not have the necessary mental capacity to enter into the Formal Agreement and that Mr Murray was fully aware of her condition.

29.It is also pleaded that Madam Chan entered into the Formal Agreement as a result of misrepresentations made to her by the estate agent, a Miss Lau, acting on behalf of Mr Murray. These were to the effect that Madam Chan’s signature would not make the Formal Agreement valid or binding and that Mr Murray would not register this agreement with the Land Registry before it was signed by Mr Khan.

30.These matters are alleged to constitute the exercise by Mr Murray of undue influence on Madam Chan.

31.Healthy Living and Madam Chan then plead that Mr Murray breached the Formal Agreement in failing to tender the balance of the purchase price of HK$7,947,000 on 25 August 2003 and that Mr Murray’s repudiation of the Formal Agreement was accepted by Healthy Living.

The decision below

32.The Deputy Judge referred to the doctrine of res judicata in the wider sense as described in the speech of Lord Kilbrandon in Yat Tung Investment Co. Limited v Dao Heng Bank Limited[1] by which it is an abuse of process to raise in subsequent proceedings matters which could and therefore should have been litigated in earlier proceedings.

33.He cited the judgment of Cheung JA in Ngai Few Fung v Cheung Kwai Heung [2008] 2 HKC 111 at §§16 and 17 addressing the rationale of the principle of abuse of process in Henderson v Henderson[2] as explained by the House of Lords in Johnson v Gore Wood & Co. (a firm).[3]

34.Applying that principle, the Deputy Judge struck out the claims of Healthy Living and Madam Chan for the various declarations and for the return of the Property to Healthy Living and damages.

35.He also struck out Madam Chan’s claims for damages.  He held, applying Johnson v Gore Wood & Co. (a firm) at pp.37B-38E, that there could be no claim for damages for frustration, mental anxiety, emotional distress, physical discomfort or inconvenience caused by an alleged breach of a contract like the subject contract for the sale and purchase of the Property.  He also held that, since Mr Murray had succeeded in the First Action and obtained the conveyance of the Property pursuant to the Formal Agreement, there was no basis for the claim for damages for the tort of intentional or reckless infliction of emotional distress.

36.Accordingly, he dismissed the action and ordered that the registration of the amended writ of summons against the Property in the Land Registry be vacated.

The grounds of appeal

37.On this appeal, the submissions of Mr Adrian Bell SC, leading counsel for Healthy Living and Madam Chan, addressed the following two issues:

(1)   First, whether the Deputy Judge should have held that this action is an abuse of process and that the claims raised in it should have been included in the 2003 Action; and

(2)   Secondly, whether there are special circumstances that should permit Madam Chan to run her case in this action.

38.On the first issue, Mr Bell contended that the Deputy Judge should have but failed to consider the reasons behind Madam Chan’s failure to apply to be joined as a defendant in the 2003 Action.  It was submitted that the Deputy Judge failed to consider the impact of Madam Chan’s psychiatric illnesses as supported by Dr Lai’s two medical reports and should have found that her psychiatric illnesses explained her failure to apply to be joined as a defendant in the 2003 Action.  Mr Bell therefore challenged the Deputy Judge’s conclusion that Madam Chan made a deliberate decision not to apply to be joined in the 2003 Action so that this action was an abuse.

39.On the second issue, it was contended that the Deputy Judge failed to take into account the special circumstances of the present action.  It was submitted that the Deputy Judge was wrong to draw the inference that Madam Chan must have “been taken care of by her son and her son’s legal advisers” and failed to take into account her mental condition at the time of the 2003 Action, as a result of which she would not have been reasonably capable to receive or comprehend any legal advice, even if given, nor to take an active role in the 2003 Action.

The legal principles

40.It was not disputed that the Deputy Judge correctly identified the relevant legal principles engaged.  As noted above, the Deputy Judge cited the judgment of this court in Ngai Few Fung v Cheung Kwai Heung at §16 in which Cheung JA set out the rationale of the Henderson v Henderson principle as explained by Lord Bingham in Johnson v Gore Wood & Co (a firm), namely:

“(1) The principle is to serve public interest in that there should be finality in litigation and that a party should not be twice vexed in the same matter.

(2) This is reinforced by the current emphasis on efficiency and economy on the conduct of litigation, in the interests of the parties and the public as a whole.

(3) The onus is on the party alleging abuse.

(4) The bringing of a claim or the raising of the defence in later proceedings may, without more, amount to abuse if the court is satisfied that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all.

(5) It is, however, not necessary, before abuse may be found, to identify any additional elements such as a collateral attack on a previous decision or some dishonesty. But where those elements are present, the later proceedings will be much more obviously abusive.

(6) There will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party.

Per Lord Bingham of Cornhill at p 90.”

41.The Deputy Judge also cited Cheung JA’s reference (in Ngai Few Fung v Cheung Kwai Heung at §17) to the emphasis in Lord Bingham’s speech in Johnson v Gore Wood & Co (a firm) which was that:

“ ‘It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so far as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not.’ ”

[Emphasis in italics in Cheung JA’s judgment]

42.As Mr Bell pointed out, that emphasis is also reflected in Lord Millett’s speech in Johnson v Gore Wood & Co (a firm)[4] where he said:

“It is one thing to refuse to allow a party to relitigate a question which has already been decided; it is quite another to deny him the opportunity of litigating for the first time a question which has not previously been adjudicated upon. This latter (though not the former) is prima facie a denial of the citizen’s right of access to the court conferred by the common law and guaranteed by article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms (1953).

…

In so far as the so-called rule in Henderson v Henderson suggests that there is a presumption against the bringing of successive actions, I consider that it is a distortion of the true position.  The burden should always rest upon the defendant to establish that it is oppressive or an abuse of process for him to be subjected to the second action.”

43.Mr Bell also referred to Ngai Few Fung v Cheung Kwai Heung at §22, where Cheung JA noted that:

“… the true basis of the Henderson or Yat Tung principle is based on abuse of process. This being the true basis of the principle then one can see immediately that it is not permissible to adopt a mechanistic approach by simply saying that since the cause of action or defence could have been raised in an earlier proceedings then it should have been so raised so that the subsequent raising of those issues in the later proceedings will necessarily become abusive.”

Is the present action an abuse?

44.There can clearly be no question that the claims Healthy Living and Madam Chan now seek to raise in this action could have been raised in the 2003 Action.  Healthy Living was a party to that action and could have amended its defence to raise the issues now sought to be litigated by it in this action.  (Indeed, the particular contention that Mr Murray repudiated the Formal Agreement by failing to complete on 25 August 2003 so that Healthy Living was entitled to rescission of that agreement was actually raised in the 2003 Action and rejected.)  So far as Madam Chan is concerned, she could have applied to be joined as a defendant to the 2003 Action to raise the claims she now seeks to advance in this action.

45.The question is whether this action is an abuse because the claims of Healthy Living and Madam Chan should (rather than simply could) have been raised in the 2003 Action.

46.Mr Bell submitted that the Deputy Judge’s conclusion that this action is an abuse of process was one arrived at by applying the prohibited mechanistic approach of simply saying that, because the issues could have been raised in the 2003 Action, it was an abuse to raise them in this action.

47.Mr Bell’s starting point as to why this action is not an abuse was that the issues sought to be raised by Healthy Living and Madam Chan have not previously been adjudicated upon.  Healthy Living had attempted to raise them but was prevented from doing so by the court’s refusal of leave.  Therefore, this was not a case of a party seeking to re-litigate matters that have already been determined by a court and the onus, which he submitted was a heavy one, lay on Mr Murray to justify the striking out of the action as an abuse of the process of the court.

48.So far as Madam Chan was concerned, Mr Bell submitted that it was unrealistic and unfair to criticise her for not applying to join the 2003 Action as a defendant because the medical evidence in Dr Lai’s reports clearly demonstrated that she was in ill health between 2003 and 2006 and still suffering from significant mental impairment in January 2006.  She was not legally represented at the time and, even if she had been, it is doubtful she would have been able to understand legal advice and to conduct litigation as a party.  In Dr Lai’s report dated 3 January 2006, he concluded:

“In my opinion Madam Chan is suffering from psychiatric illnesses in addition to her physical illnesses. The illnesses include an adjustment disorder with anxiety and depressed symptoms, and a delusion. She also exhibits some features of impairment of cognitive functioning.”

49.In my view, Healthy Living’s attempt to re-litigate the issues it sought to raise by amendment in the 2003 Action is clearly an abuse of process of the court.  Unlike the position of Madam Chan, whose position I shall address below, there is no evidence to explain why Healthy Living did not advance in the 2003 Action all its arguments as to why the sale of the Property to Mr Murray should not be specifically enforced.  Madam Chan’s health cannot justify delay on the part of Healthy Living, which is a separate legal personality.  The evidence shows that Mr Khan was the director of Healthy Living having the conduct of the litigation for the company.  The company was legally represented and no good reason has been demonstrated as to why it did not raise all its defences in good time. 

50.It is true that the court’s refusal of leave to amend in the 2003 Action means that those issues have not been adjudicated upon.  But that cannot be a conclusive consideration on an application seeking to invoke the wider principle of res judicata.  If it were, attempts to re-litigate matters that should have been litigated in earlier proceedings would never be struck out as an abuse of the court’s process.

51.On the contrary, in my view, the failed attempt by Healthy Living to amend in the 2003 Action is a weighty factor in support of the conclusion that its present action is an abuse of process.  It is relevant, when looking at the question of abuse, to consider the consequences to a defendant of allowing issues to be re-litigated.  In this context, the 2003 Action proceeded to trial and Mr Murray was entitled to think, after the trial of that action, that his ownership of the Property, so far as Healthy Living was concerned, was conclusively determined. This belief would reasonably have been reinforced by the subsequent events of: (i) the dismissal of the application for a stay of execution of the judgment in the 2003 Action, (ii) the dismissal of the application that the Formal Agreement had been annulled and for an order postponing completion until after the determination of the 2006 Action, (iii) the dismissal of the appeal in CACV 168/2006 against the judgment in the 2003 Action, (iv) the execution of the formal assignment of the Property to Mr Murray pursuant to the order for specific performance, and (v) the striking out, as an abuse of process, of the 2006 Action seeking to advance a claim by a different but closely related party, Nu Life International, to a beneficial interest in the Property.

52.In all these circumstances, the institution of this action by Healthy Living was, in my opinion, clearly an abuse of process.

53.I turn then to consider the position of Madam Chan.

54.Despite Mr Bell’s submissions to the contrary, I consider the Deputy Judge was right in §42 of the Decision where he held:

“… there is certainly a sufficient degree of identification between her and Healthy Living so that the decision in the first action should be binding on her in this action.”

55.It is clear, in my judgment, that Madam Chan played an active role in the sale of the Property.  She signed both the Provisional Agreement and the Formal Agreement for Healthy Living.  She is and was at all material times a director of Healthy Living.  Although it appears she did not become a shareholder of the company until November 2006, the shares she acquired then were transferred to her by her two sons.  It was clearly a family-owned company.  In addition, Madam Chan gave a witness statement for Healthy Living in the 2003 Action and gave evidence on its behalf at the trial of that action.  And after judgment in the 2003 Action, she signed the assignment of the Property giving effect to the order for specific performance in favour of Mr Murray.

56.Although Mr Bell sought to minimise the role played by Madam Chan in these matters and submitted that she could not have been the directing mind of Healthy Living for the 2003 Action, the fact remains that the claim in that action concerned matters with which she had been closely involved.  Healthy Living was a family company and, on his own evidence, her son, Mr Khan, was conducting the litigation on its behalf.  It beggars belief that Mr Khan and his solicitors (who were also representing Healthy Living) would not have kept Madam Chan fully informed of the status of the litigation. They would clearly have been in a position to advise her on all necessary steps to be taken to advance her interests in respect of the Property, so far as they were not already being advanced by Healthy Living, and to arrange for those steps to be taken.

57.As for the medical reports, although these were based on examinations of Madam Chan in December 2005, the evidence is directed at the mental capacity of Madam Chan when she signed the Provisional and Formal Agreements in June 2003.  Dr Lai opines as to Madam Chan’s mental capacity to manage and administer her assets and affairs in June 2003 but does not say that, throughout the time when the 2003 Action was being litigated, Madam Chan’s health prevented her from applying to be joined as a party to that action.

58.In these circumstances, despite the evidence of Madam Chan’s physical and mental illnesses as disclosed in Dr Lai’s reports, I am not persuaded that there was any reasonable excuse for Madam Chan not applying to be joined in the 2003 Action and to raise in that action the issues she now wishes to ventilate in this action.  There is no suggestion the facts on which the allegations of duress and undue influence Madam Chan now seeks to advance were not known at the outset of the 2003 Action by Mr Khan (who was running the litigation).  An application by Madam Chan to join as a party to the 2003 Action would not have been an onerous or unduly difficult exercise. There is no reason why Healthy Living’s legal advisers, who also acted in the 2003 Action for Mr Khan, could not have acted for her as well.

59.It follows that I consider the Deputy Judge was justified in drawing the inference, notwithstanding the medical evidence relied upon, that Madam Chan’s decision not to join in the 2003 Action was “obviously her considered decision”.[5] 

60.In my judgment, the institution of this action by Healthy Living and Madam Chan was an abuse of process within the doctrine of res judicata in its wider sense and it was therefore open to the Deputy Judge to exercise his discretion to strike it out.  This conveniently leads to the next issue to be considered.

Are there special circumstances to justify this action?

61.Mr Bell submitted that the Deputy Judge failed to take into account the special circumstances of the case which were that Madam Chan did not have legal advice in the 2003 Action and that her physical and mental health was such that she was not capable of engaging actively in that action.

62.Since these are the same arguments relied on by Mr Bell in support of his submission that the present action by Madam Chan is not an abuse of process, the analysis above applies equally here.

63.The Deputy Judge clearly had the medical evidence concerning Madam Chan in mind when he was considering the application before him since he referred, at paragraph 43 of the Decision, to the argument advanced on behalf of Madam Chan below:

“… that the defendants in the first action could not have amended their defence to plead duress and undue influence on Chan and to adduce the two medical reports by Dr Benjamin Lai on Chan dated 3 January and 10 January 2006. Dr Lai in these reports was of the opinion that Chan was mentally not competent to sign the formal agreement.”

64.And at paragraph 45, he described the special circumstances urged on him by counsel then appearing for Healthy Living and Madam Chan[6] as being:

“… She was not legally represented and had not obtained legal advice. She also had a long history of medical problems as detailed in the medical reports. Account should also be taken of whether she could have expressed herself and described what had happened in the sale and purchase of the property.”

65.I therefore do not accept that Mr Bell was correct in submitting that the Deputy Judge considered Madam Chan’s medical condition only in the context of whether that issue could only be raised in the 2003 Action and not in the context of whether that medical condition had affected her ability to make an application to join the 2003 Action in the period from its commencement in 2003 until 2006.

66.So far as the special circumstances were concerned, the Deputy Judge did not accept that these justified the bringing of this action by Madam Chan.  At paragraph 48 of the Decision, he said:

“Regarding the argument that Chan had no legal advice, this ignores the fact that her son and her company, Healthy Living, were all along legally represented. She had also given evidence as a witness in the first action. The sale and purchase of the property was a matter that she and her son had tremendous interests in. She was not a distant or independent party to the matter. I do not accept that she was so ignorant and had not been taken care of by her son and her son’s advisers.”

67.For the reasons I have already set out above, I agree with the Deputy Judge’s conclusion that the special circumstances do not justify Madam Chan in maintaining this action against Mr Murray.

Madam Chan’s claims not viable in any event

68.As noted above, as regards Madam Chan’s claims for damages, the Deputy Judge held that these did not give rise to any legally viable claim for damages for mental anxiety, emotional distress, physical discomfort or inconvenience caused by an alleged breach of contract (Decision §51) and also that these did not give rise to any legal viable claim for damages for the tort of intentional infliction of emotional distress (Decision §52).  He accordingly struck out these claims.

69.There is no appeal against his holdings in this regard and so those claims could not be restored in any event.

Conclusion

70.For the above reasons, I do not consider there is any material error vitiating the Deputy Judge’s exercise of discretion to strike out this action as an abuse of process and I would dismiss this appeal.

71.On the question of costs, the Deputy Judge awarded costs to Mr Murray on an indemnity basis since he held that this was the third time Mr Murray had been vexed with the same subject matter.  There was no appeal against the Deputy Judge’s decision on costs independent of the appeal itself and so his costs order must stand. 

72.So far as the costs of the appeal are concerned, these must follow the event.  Mr Bell submitted that there was no reason these costs should be taxed on a higher scale unless the court were to take the view that the appeal was itself abusive.  However, since the outcome of the appeal is that this Court agrees with the Deputy Judge that the institution of this action constitutes an unjust harassment of Mr Murray, I consider that the costs of the appeal should also be taxed on an indemnity basis, if not agreed.

Hon Bharwaney J:

73.I agree with the judgment of Fok JA and with the proposed orders.

Mr Adrian Bell SC & Mr James Wong, instructed by Messrs Huen & Partners, for the 1^st and 2^nd Plaintiffs/Appellants

Mr Lee Tung Ming, instructed by Messrs Wong, Hui & Co., for the Defendant/Respondent

[1] [1975] AC 581 at 590.

[2] (1843) 3 Hare 100 at 115.

[3] [2002] 2 AC 1.

[4] [2002] 2 AC 1 at 59C-E and 59H-60A.

[5] Decision §37.

[6] Not Mr Bell.