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Ho Kwok Ming v Wong Hung Ho And Others

Judgment Cited authorities 7 Cited in Precedent Map Related
Vincent
Judgment Date22 June 2022
Neutral Citation[2022] HKDC 614
Year2021
Judgement NumberDCCJ5031/2021
Subject MatterCivil Action
CourtDistrict Court (Hong Kong)
DCCJ5031A/2021 HO KWOK MING v. WONG HUNG HO AND OTHERS

DCCJ 5031/2021

[2022] HKDC 614

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 5031 OF 2021

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BETWEEN
HO KWOK MING (何國明) Plaintiff

and
WONG HUNG HO (王鴻浩) 1st Defendant
HO KWOK WING (何國榮) 2nd Defendant
HO KWOK MAN (何國文) 3rd Defendant

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Before: His Honour Judge H. Au-Yeung (Paper Disposal)
Dates of written submissions: 11, 25 & 1 June 2022
Date of Decision: 22 June 2022

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DECISION

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A. BACKGROUND

1. By a Decision dated 27 April 2022 (“Decision”), this Court granted an interim injunction against the 1st defendant and made a costs order nisi that the 1st defendant shall bear the plaintiff’s costs of and incidental to the Summons filed on 29 October 2021 (“the Summons”) (including counsel’s fees incurred for the Summons with all costs reserved), to be taxed if not agreed, with legal aid taxation.

2. Pursuant to the directions given in paragraph 121 of the Decision, the 1st defendant applied to vary the said costs order nisi. It was submitted that the costs of the Summons should be in the cause of the action. Alternatively, it was contended that an order for “the plaintiff’s costs of the Summons be in the cause” should be made.

B. LEGAL PRINCIPLES

3. It is trite that costs is in the wide discretion of the Court by taking into account all the circumstances of the case. There is no invariable principle against the making of an immediate order as to costs in respect of an application for interlocutory injunction. Nor is there any “default rule” or “starting point” that the costs of such an application should normally be in the cause of the action: Chow Steel Industries Public Company Limited & Others v Ko Sung & Others [2021] HKCA 1642 at paragraph 21.

4. In China Medical Technologies, Inc. (in liquidation) & Others v. Samson Tsang Tak Yung & Others [2022] HKCA 42, Chow JA had the following to say:

“8. […] recent authorities after the CJR suggest that the courts are now more ready in interlocutory applications to make an immediate order as to costs, instead of costs in the cause, or plaintiff/defendant’s costs in the cause: see Midland Business Management Ltd v Lo Man Kui (No 2) [2011] 2 HKLRD 667, at §§9-12; Wing Fai Construction Co Ltd v Yip Kwong Robert (No 2) (2012) 13 HKCFAR 454, at §7; Predicine Holdings Ltd v Bianchi (Hong Kong) Ltd [2021] 2 HKLRD 216, at §31; and Chow Steel Industries Public Company Ltd v Ko Sung [2021] HKCA 1642, at §§22-27.

9. [...]

10. In the context of interlocutory injunctions (including Mareva injunctions), Au J (as he then was) in Mendlowitz & Associates Inc v Winner International Group Ltd, HCA 574/2009 (14 May 2010), said the following:

“[28] I do not think it is now right to say that as a matter of principle, the costs of an interlocutory injunction should be in the cause unless there is justification for its departure. The Court is entitled to and should look at the merits of the injunction itself as at the time of the application to decide what should be the proper costs order for that application in all the circumstances, which do not necessarily depend on the outcome of the trial.

[29] In Bushbury Land Rover Ltd v Bushbury Ltd [1997] FSR 709, the first instance judge refused to grant an interlocutory injunction against the respondent in relation to passing off on the balance of convenience and further ordered the applicant to pay the respondent’s costs. The applicant sought leave to appeal against that costs order, contending that it should be the respondent’s costs in the cause, which was the normal costs order for interlocutory injunction, and that there was nothing to justify a departure from it in that case. A single Lord Justice dismissed the application for leave, and the applicant renewed its application before two members of the Court of Appeal. In dismissing the renewed application for leave and in dealing with the applicant’s said submissions, Auld LJ said as follows at 712:

‘In my judgment, that argument [that the normal costs order for interlocutory injunction should be the respondent’s costs in the cause unless there was anything to justify a departure] … ignores the clear distinction between entitlement to interlocutory relief and final judgment which underlines Lord Diplock’s identification in American Cyanamid Co v Ethicon Ltd [1975] AC 396 of the criteria on which the court should exercise its discretion whether to grant the former. The fact that a plaintiff may succeed ultimately does not demonstrate that he should have been granted interlocutory relief when the merits of the matter were still unresolved and the court was balancing convenience. Final judgment provides no hindsight, tipping the earlier balance one way or the other.’

…

[30] There is thus nothing wrong in principle for this Court, in the exercise of its discretion, to look at the merits of the application for the Injunction on its own to decide what proper costs order should be made in all the circumstances, without ‘linking’ it to what may happen at the end of trial or to the action itself.”

11. In Chow Steel Industries Public Company Ltd, Kwan VP (giving the judgment of the Court of Appeal) quoted with approval §28 of the judgment of Au J above and continued as follows:

“[24] Likewise in England, it is not the law or practice that the costs of interlocutory injunctions should normally be in the cause of the underlying action …

[25] In Albon v Naza Motor Trading Sdn Bhd [2008] 1 Lloyd’s Rep 1, the applicant obtained an interlocutory anti-arbitration injunction on the ground that his signature on the joint venture agreement that contained the arbitration clause was forged. The respondent (Naza) sought inter alia permission to appeal against the judge’s decision to award to the claimant the costs of the application. In refusing to grant permission to appeal, Longmore LJ said at §21:

‘21. The argument for Naza on this issue is that costs are not usually ordered on applications for interim injunctions since it is not until trial that it can be known whether the claimant has the right which he asserts he has. … This is not, however, an invariable rule. The narrow issue in the present case is what is to happen while the forgery issue is being determined; that does not depend on the claimant being right on the forgery issue. Granted that the forgery issue is to be determined in England, Naza was perfectly able to form a view as to the likelihood of their persuading the court that that the arbitration should continue meanwhile. The judge was entitled to conclude that they miscalculated and should suffer the consequences. This is very much a matter for the judge’s discretion and I would refuse permission to appeal on this question.’

[26] Albon was affirmed in Koza Ltd & Anr v Koza Altin Isletmeleri AS [2020] Costs LR 1479, in which Popplewell LJ emphasised at §4 that there is no ‘general rule applicable in all cases’ and ‘no invariable practice’ that where an applicant obtains an interlocutory judgment on the balance of convenience, the court should reserve costs. In that case, the injunction was not of a ‘holding the ring’ type, and the issues which were ventilated upon the application would not be revisited as part of the substantive dispute.

[27] What is important to note from these decisions is that the court’s hands are not tied. If factors are present that warrant an immediate order as to costs, the court may exercise in the exercise of its discretion make such an order.”

12. In our view, it is neither necessary, nor appropriate, to put cases of interlocutory injunctions (including Mareva injunctions) into any special category insofar as costs are concerned. In all cases, the court has a broad discretion to exercise as to whether to make an immediate costs order in favour of the plaintiff/defendant, or reserve the issue of costs to the trial, or order that costs, or plaintiff/defendant’s costs, be in the cause. In some cases, it may be appropriate to order that costs, or plaintiff/defendant’s costs, be in the cause as suggested by Mr Alder. However, it is not correct to treat such order as being the default, or prima facie, position. Each case must be looked at having regard to all relevant circumstances.

13. In the present case, at the hearing before the judge, the 2nd Defendant left the issue of good arguable case ‘in the Court’s hand’ (for the purpose of the application in question), but pursued the issues of substantial delay / risk of dissipation, whether the Plaintiffs should have applied ex parte without notice, and material non-disclosure / misstatement. Save in relation to the issue of material non-disclosure / misstatement (which we will further discuss below), this court has found against him on all other issues, and accordingly held that the Injunction (save §4(2)(a) to (c) and (f) thereof) ought to be continued...

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