ANGLO STARLITE INSURANCE CO LTD (IN LIQUIDATION) v. TRIPLE INVESTMENTS LTD AND OTHERS

HCA 394/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 394 OF 2010

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BETWEEN

ANGLO STARLITE INSURANCE COMPANY LIMITED
(In Liquidation)
Plaintiff
and
TRIPLE INVESTMENTS LIMITED 1st Defendant
ATMARAM PARSHOTAMDAS BALANI 2nd Defendant
MINOO ATMARAM BALANI 3rd Defendant
MANESH ATMARAM BALANI 4th Defendant
JIGNESH KESHAVLAL SHAH 5th Defendant
KAI BOON CHEONG 6th Defendant
NARENDRA RANCHHODDAS MODI 7th Defendant

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HCA 395/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 395 OF 2010

____________

BETWEEN

ANGLO STARLITE INSURANCE COMPANY LIMITED
(In Liquidation)
Plaintiff
and
ATMARAM PARSHOTAMDAS BALANI 1st Defendant
MANESH ATMARAM BALANI 2nd Defendant
MINOO ATMARAM BALANI 3rd Defendant
JIGNESH KESHAVLAL SHAH 4th Defendant
KAI BOON CHEONG 5th Defendant
NARENDRA RANCHHODDAS MODI 6th Defendant

____________

HCA 397/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 397 OF 2010

____________

BETWEEN

ANGLO STARLITE INSURANCE COMPANY LIMITED
(In Liquidation)
Plaintiff
and
ATMARAM PARSHOTAMDAS BALANI 1st Defendant
MANESH ATMARAM BALANI 2nd Defendant
ROHINI ATMARAM BALANI 3rd Defendant
SAMMY SAMTANI CHOTIRMAL 4th Defendant
MINOO ATMARAM BALANI 5th Defendant
JIGNESH KESHAVLAL SHAH 6th Defendant
KAI BOON CHEONG 7th Defendant
NARENDRA RANCHHODDAS MODI 8th Defendant

____________

(Heard Together)

Before: Deputy High Court Judge L. Chan in Chambers

Date of Filing Written Submissions: 21 December 2010

Date of Reply Submissions: 30 December 2010

Date of Decision: 12 January 2011

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D E C I S I O N

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1. There are three applications for variation of costs orders nisi. Both sides have agreed that these applications can be disposed of on paper and without a hearing.

2. On 11 October 2010, Master Hui ordered Mr and Mrs Balani to be joined as defendants in these three actions. Master Hui also orderedthe costs of the applications be in the cause save that the costs of the argument be borne by Mr and Mrs Balani.

3. Mrs Balani appealed against these orders but not Mr Balani. I dismissed her appeals on 7 December 2010. I also ordered her topay 50% of the costs of the appeal with certificate for counsel. The reason for not requiring her to pay the plaintiff the fullcosts was because the plaintiff had not pleaded the particulars of dishonest or fraudulent breach of trust allegedly committed byher. The particulars were only contained in the affidavits of the plaintiff used in support of the applications for joinder beforethe Master. I did not disturb the Master’s orders of costs.

4. Mrs Balani wants to vary all the costs orders both before the Master and on appeal. She seeks to have no order as to costs in respectof the appeals or for the argument before the Master. For the orders that the other costs of the applications before the Masterbe in the cause, she seeks to change them to orders awarding the costs to her.

5. Her counsel submitted that the Master was wrong in allowing the joinder when the particulars were wholly lacking. The Master’sorders for joinder were therefore wrongly made. The Master ought to have allowed the applications conditionally upon the particularsbeing pleaded in the statements of claim. The draft amended statements of claim as produced before the Master did not have theseparticulars.

6. Counsel for the plaintiff however submitted that no formal pleadings needed be filed for the applications for joinder, the draftamended statements of claim were produced to inform the parties and the court of the nature of the claims against the Balanis. Affidavitscan often be used to satisfy the requirements of joinder in O.15 r.6(2)(b)(i) and (ii) of the RHC. The Master made the orders onthe basis of all the materials before him which included the affidavit evidence.

7. I agree with the counsel for the plaintiff that the Master was right in making the orders without imposing any condition that theamended statements of claim to be filed pursuant to the orders should contain the necessary particulars. The task of the Masterwas to decide whether there was sufficient reason to join the Balanis as defendants. He had no task to scrutinize the draft pleadingswhich were merely produced for reference. That is why the Master’s orders will not preclude the Balanis from seeking further andbetter particulars of the amended statements of claim that were filed later. There is therefore no basis to vary the Master’sorders of costs for the arguments before him.

8. Regarding the costs of the applications before the Master apart from the costs of argument, counsel for Mrs Balani submitted thatthe plaintiff applied for indulgence to amend and should pay the costs of the applications. Counsel further submitted that the Masterwas wrong in not requiring particulars to be pleaded in the amended statements of claim. I have already held against the secondpoint.

9. On the first point, the usual practice is to require the party seeking indulgence to pay costs. However in the present case, MrsBalani had positively opposed the applications by filing affidavits thereby occasioning more work and more costs. She lost her opposition. I think the Master was benevolent to her in ordering the costs be in the cause. I do not see any basis to vary the incidence ofthese costs.

10. Regarding the costs of the appeals, counsel for Mrs Balani submitted that she should have appealed rather than seeking further andbetter particulars.

11. Counsel also submitted that a plaintiff will not be given costs in successfully opposing a striking out if the claim has to be improvedby amendment so as to constitute an arguable cause of caution.

12. That may be right. However, Mrs Balani did not apply for further and better particulars. She took the wrong route of appealingwhen she had been properly joined by the orders of the Master.

13. I ordered the particulars to be included in the amended statements of claim just to avoid the need for further applications as therewas clear justification for them and they have been spelt out in the affidavits already. I ordered Mrs Balani to pay only 50% ofthe costs of the appeals just to express the court’s disapproval of the plaintiff’s insistence that there are already sufficientparticulars when there are not.

14. For these reasons, there is also no basis to vary the costs orders nisi for the appeals. I therefore dismiss Mrs Balani’s applications to vary the costs orders nisi. I also order her to pay the costs of these applications to the plaintiff forthwith with certificate for counsel. If the partiescannot agree on the amount of these costs within 14 days, they may fix a 9:30 a.m. hearing before me for summary assessment.

(L. Chan)
Deputy High Court Judge

Mr Douglas Lam, instructed by Messrs Hogan Lovells, for the Plaintiff

Mr Paul J Carolan, instructed by Messrs Andrew W Y Ng & Co., for the 3rd Defendant (in HCA 394/2010 and HCA 395/2010), 5th Defendant(in HCA 397/2010)