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Ng Yuk Pui Kelly v Dung Wai Man And Others

Judgment Cited authorities 14 Cited in Precedent Map Related
Vincent
Judgment Date02 May 2019
Neutral Citation[2019] HKCFI 1157
Year2019
Judgement NumberHCA1826/2011
Subject MatterCivil Action
CourtCourt of First Instance (Hong Kong)
HCA1826B/2011 NG YUK PUI KELLY v. DUNG WAI MAN AND OTHERS

HCA 1826/2011

[2019] HKCFI 1157

HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1826 OF 2011

____________

BETWEEN
NG YUK PUI KELLY Plaintiff

and
DUNG WAI MAN 1st Defendant
THE ESTATE OF NG BING KUEN, DECEASED 2ndDefendant
(represented by NG KWOK WAH VINCENT)
SINO LEADING LIMITED (國賢有限公司) 3rd Defendant
(discontinued)
NG KWOK WAH, VINCENT 4th Defendant
NG KWOK KEUNG, JAMES 5th Defendant
NG LAI LING, WINNIE 6th Defendant

____________

Before: Hon L Chan J in Court
Date of the written submissions of the 4th to 6th defendants: 25 March 2019
Date of the plaintiff’s written submissions: 8 April 2019
Date of the written reply submissions of the 4th to 6th defendants: 23 April 2019
Date of Decision on Costs: 2 May 2019

________________________

DECISION ON COSTS

________________________

1. I ordered in my judgment dated 24 January 2019 that Ng Kwok Wah, Vincent (“Vincent”), Ng Kwok Keung, James (“James”) and Ng Lai Ling Winnie (“Winnie”), the children of Mrs Ng (collectively “the children”) be personally joined under O 62 r 6A(1) as the 4th, 5th and 6th defendants in this action for the purpose of costs only.

2. In response to the suggestion of the children’s solicitors, I directed that the children be at liberty to file affirmations and submissions on why they should not be made liable to pay the costs of the action together with the 1st defendant, Mrs Ng Wai Man (“Mrs Ng”) and the 2nd defendant, the Estate of Ng Bing Kuen (“Kuen’s estate”) jointly and severally to Ng Yuk Pui Kelly (“Kelly”).

3. The children duly filed their affirmations with Vincent and Winnie adopting the contents of James’ affirmation as theirs. Counsel for the children and for Kelly have filed their written submissions on why the costs order against the children as contemplated in the judgment should or should not be made. Mr Victor Lui, counsel for the children has also filed his reply submissions on 23 April 2019.

The law

4. The court’s power to make a costs order against a non-party is provided in s 52A(2) of the High Court Ordinance (“HCO”). It provides:

“Without prejudice to the generality of subsection (1), the Court of Appeal or the Court of First Instance may, in accordance with rules of court, make an order awarding costs against a person who is not a party to the relevant proceedings, if the Court of Appeal or the Court of First Instance, as the case may be, is satisfied that it is in the interests of justice to do so.”

5. O 62 r 6A of the Rules of the High Court further provides:

“(1) Where the Court is considering whether to exercise its power under section 52A or 52B of the Ordinance to make a costs order in favour of or against a person who is not a party to the relevant proceedings—

(a) that person must be joined as a party to the proceedings for the purposes of costs only; and

(b) that person must be given a reasonable opportunity to attend a hearing at which the Court shall consider the matter further.”

6. An application under s 52A of the HCO is usually proceeded summarily in two-stages:

(1) In the 1st stage, the court considers whether the non-party should be joined for the purpose of costs. The applicant does not need to show an “arguable” case, nor is it open to the non-party to challenge the application on the ground that he has “no real prospect of success”. The court will only refuse joinder if it is plain and obvious that the application amounts to an abuse of process. (see Sun Focus Investment Ltd v Tang Shing Bor [2012] 5 HKLRD 853 at §§10-19 per Mimmie Chan J; Big Island Construction (HK) Ltd v Wu Yi Development Co Ltd (1st stage decision) (unreported, HCA 1957/2005, HCA 714/2007 & HCA 886/2007, 29 July 2016) at §§4-7 per Au-Yeung J; Anstalt & Ors v Hayek & Ors [2005] EWHC 2435 (Ch) at §§35, 53 per Etherton J; PR Records Ltd v Vinyl 2000 Ltd & Anor [2008] 1 Costs LR 19 at §§34, 44 per Morgan J.)

(2) In the 2nd stage, the non-party joined as defendant for the purpose of costs will show cause why no costs order should be made against him. The overall consideration is always on whether it is in the interests of justice to make such an order. (see Sun Focus at §23; Big Island (1st Stage) at §3; Big Island Construction (HK) Ltd v Wu Yi Development Co Ltd (2nd stage decision) [2018] 2 HKLRD 1145) at §8 per Au-Yeung J.)

7. Mr Victor Lui, counsel for the children referred to a number of cases and submitted that there are a number of factors to consider in stage 2 of the application. An important point is that the court will treat the application with caution and will only make a costs order in plain and straightforward cases: Sun Focus at §23; Big Island (2nd Stage) at §9(a). The rule that costs follow the event does not apply and the hurdle is much higher: Hong Kong Civil Procedure 2019 (Vol 1) at §62/6A/5; citing Symphony Group Plc v Hodgson [1994] QB 179 at 193A per Balcombe LJ.

8. In Metalloy Supplies Ltd v MA (UK) Ltd [1997] 1 BCLC 165 at 171B, Millett LJ observed that an order for costs against a non-party is “exceptional since it is rarely appropriate”. But “exceptional” in this context means no more than outside the ordinary run of cases where parties pursue or defend claims for their own benefit and at their own expense. The ultimate question is whether in all the circumstances it is just to make the order: Dymocks Franchise Systems (NSW) Pty Ltd v Todd & Ors [2004] 1 WLR 2807 at §§25(1), per Lord Brown, applied in Leung Chung Ching Edwin v Estate of Leung On Mei Amy [2016] 2 HKLRD 365 at §47 per Zervos J (as he then was). But subsequent authorities since Metalloy Supplies held that it is not necessary for the judge to find that the case was “exceptional” for making such costs order. (Systemcare (UK) Ltd v Services Design Technology Ltd & Anor [2011] 4 Costs LR 666; and Big Island (1st Stage)).

9. One factor to consider is whether the non-party is regarded as the real party to the litigation. If the non-party does not merely fund the proceedings but also substantially controls or is to benefit from them, justice will ordinarily require that, if the proceedings fail, he will pay the successful party’s costs. The non-party in these cases is not so much facilitating access to justice by the party funded as he is gaining access to justice for his own purposes: Big Island (1st Stage) at §8; Big Island (2nd Stage) at §9(b); Dymocks Franchise Systems at §§25(3), 29; The Liberty Container (2007) 10 HKCFAR 256 at §§28 & 30 per Bokhary PJ. A costs order against a non-party may be made where the party has been responsible for bringing the proceedings and doing so in bad faith or for an ulterior purpose or there is some other conduct on his part which makes it just and reasonable to make the order against him: Metalloy Supplies at 171B per Millett LJ; Leung Chung Ching Edwin at §41; Hong Kong Civil Procedure 2019 (Vol 1) at §62/6A/6. The key consideration is whether the non-party is the driving force behind the litigation and involved in it in such a way and to such an extent that he should be made liable for costs: Leung Chung Ching Edwin at §49.

10. A non-party’s impropriety and giving dishonest evidence in the primary proceedings is a relevant factor in the exercise of discretion of whether to order costs against him: Big Island (2nd Stage) at §13; citing R + V Versicherung AG v Risk Insurance & Reinsurance Solutions SA [2005] EWHC 2586 (Comm) at §15 per Moore-Bick LJ; R + V Versicherung A.G. v Risk Insurance & Reinsurance S.A. and Ors [2006] EWCA Civ 314 (CA) at §§15-16 per Chadwick LJ; Oriakhel v Vickers [2008] EWCA Civ 748at §13 per Jacob LJ.

11. Mr Justin Ismail, counsel for Kelly, referred to Bombardier Transportation UK Limited v Merseytravel (Costs) [2018] EWHC 41 (TCC), where Coulson J said:

“6. The Court of Appeal have repeatedly said that the trial judge has a wide discretion when considering costs orders against a non-party: see the judgments of Longmore LJ in Petromec Inc v Petrolio Brasileiro SA Petrobras [2006] EWCA Civ 1038, and Chadwick LJ in Alan Phillips Associates Limited v Terence Edward Dowling [2007] EWCA Civ 64. Indeed, in the latter case, at paragraph 31, Moses LJ noted that “there is now an abundance of authority on the absence of any need for abundant authority on the principles which should guide a judge as to whether to make a third party order for costs.””

12. These observations were underlined in the English Court of Appeal’s decision of Deutsche Bank AG v Sebastian Holdings Inc and another [2016] 4 WLR 17, where Moore-Bick LJ (giving judgment of the court) said at §62:

“62. As all three members of the court observed in Petromec v Petrobras, the exercise of the discretion is in danger of becoming over-complicated by authority. The decision of the Privy Council in Dymocks, which contains an authoritative statement of the modern law, explains and interprets the Symphony guidelines in a way which reflects the variety of circumstances in which the court is likely to be called upon to exercise the discretion. Thus, the Privy Council has explained that an order of this kind is “exceptional” only in the sense that it is outside the ordinary run of cases where parties pursue or defend claims for their own benefit and at their own expense. Similarly, it has made it clear that the absence of a warning is simply one factor which the court will take into account in an appropriate case when deciding whether, viewed overall, it would be unjust to exercise the discretion in favour of making an order for costs against the third party....

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