HCMP001480 2015
HCMP001480 2015
HCMP001480 2015
HCMP 1480/2015
IN THE HIGH COURT OF THE
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and
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BETWEEN
Plaintiff
and
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DING YU ()
1st Defendant
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DECISION
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and
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parties. I mean no disrespect to any party for not setting out all the
arguments but concentrate on only the most important points. The other
points, whether decided in favour of one or the other party would not
affect my decision.
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BACKGROUND
4.
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agreement, the clients agreed to bear the solicitors fees and disbursements
(including counsels fees) for the trial of HCA 992 of 2010 (the
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action).
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brother DG was the true beneficial owner of HKF (the real issue). The
counterclaim was by DY (not HKF) against his brother DG. Trial of the
action (the trial) commenced about one month after the retainer
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6.
issued bills of costs to the clients, being costs incurred for the trial of the
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Action. As the bills remained outstanding, KLG and Dexter Lam & Co
respectively issued HCMP 1569/2015 and the present originating
summons for recovery of their costs. In both sets of proceedings, HKF
applied, by counterclaim, to set aside the respective retainer agreement.
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(the KLG Judgment), this court set aside the retainer agreement
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between KLG and HKF and dismissed KLGs claim as against HKF.
Judgment was entered against DY on 18 March 2016.
10.
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should pay for the costs of the opposite side, the Court has complete
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B. SANDERSON ORDER
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Under Order 62, rule 3(2) of the Rules of the High Court,
costs generally follow the event. But the court has discretion to make
a Sanderson order (the principles of which are not disputed) if the
circumstances warrant it. This type of order is not confined to personal
injuries cases, as propounded by Mr Cheung.
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looks to see whether it was reasonable in all the circumstances of the case
for the plaintiff to join the successful defendant in the action. See Chong
Ngan Seng v China Harbour Engineering Co Ltd & ors, CACV 54/2012,
25 September 2013, 5-6.
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16.
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the only directors and shareholders of HKF on record at that time, they
did not purport to sign as directors or shareholders for HKF and HKFs
chop was not applied to the retainer agreement. There appeared to be no
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20.
There was not even a prima facie case against HKF. On this
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convince the court that HKF was a party to the retainer agreement, the
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position was as follows. Six weeks before the originating summons was
issued, LCP had pointed out (by letter dated 11 May 2015) to
Dexter Lam & Co that the real issue in the action was between DY and
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his brother DG and that HKF was joined as a necessary party to be bound
by the result. There was no active participation of HKF in the action.
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nominal party, the company should not expend its funds in a partisan way
in those proceedings.
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22.
principles did not apply to Dexter Lam & Cos situation. It was true that
Dexter Lam & Co had acted for DY when DYs very first firm of former
solicitors (King & Wood) sued for solicitor-client costs. Those costs
concerned steps taken in the early stages of the action, ie for injunction,
receivership order and resisting the application for leave to appeal against
the receivership order. However, by the time of the retainer agreement,
much more evidence had been filed for the action. Even if Dexter Lam &
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Co was not regarded as new in the action, that firm would at least have
been entitled to go through the documents to determine for itself what the
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real disputes were and whether or not HKF should be a proper party. It
was not obliged to rely on the word of the clients (or even Mr Samuel
Ngo or KLG) as to the real issues in dispute. Just this part of the work
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Dexter Lam & Co was apparently aware that KLG would not
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act for the clients for lack of costs on account for counsels fees.
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that Dexter Lam & Co had been in a position to protect itself with costs
on account at the time the retainer agreement was signed, and yet it was
content with just a promise by the clients to pay over all proceeds of sale
as costs on account.
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judgment debts and HKF may not be able to recover costs against him.
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(a)
(b)
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unpaid by DY.
(c)
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(d)
B4. Balancing the interests of Dexter Lam & Co, HKF and DY
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position, it would not be fair to leave HKF to recover costs from DY who
has not met huge judgment debts and cannot be located. It would have
been more appropriate to make a Bullock order. After all, the benefit of
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retainer agreement. It clearly arose out of Dexter Lam & Cos claim.
Given my views in paragraphs 19 and 20 above, the counterclaim would
have been justified. I therefore make the same order as for costs to HKF
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on indemnity basis.
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It had to be adjourned because (i) Dexter Lam & Co did not indicate
beforehand that it would seek a Sanderson order; and (ii) DY was not
served with the summons for discontinuance against HKF, in which DY
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was asked to bear costs. HKF, on the other hand, was ready to proceed.
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29.
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a Sanderson order.
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because Dexter Lam & Co had not indicated that it would seek
a Sanderson order. The arguments on costs for a simple application to
discontinue would not have warranted much costs. Accordingly I award
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CONCLUSION
31.
I order costs to follow the event such that Dexter Lam & Co
shall bear the costs of HKF on the originating summons and in relation to
the counterclaim on indemnity basis. I decline to make a Sanderson or
Bullock order against DY as the joinder of HKF was unreasonable.
32.
of HCA 1569/2015, the arguments in both cases were similar. In fact, this
case had stronger merits than the other for the reasons given in
paragraphs 19 and 20 above. Further, in HCA 1569/2015, this court
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disallowed HKF costs on an abandoned issue and that ruling should apply
to the present case.
33.
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(Queeny Au-Yeung)
Judge of the Court of First Instance
High Court
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