HOUSE OF STEEL, GENERAL TRADING AND CONTRACTING COMPANY WLL v. CHINA SPARK LTD

DCMP 1834/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 1834 OF 2013

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BETWEEN

HOUSE OF STEEL, GENERAL TRADING Plaintiff
AND CONTRACTING COMPANY WLL

and

CHINA SPARK LIMITED Defendant

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Before: Deputy District Judge Sanjay A Sakhrani in Chambers (open to public)

Dates of Hearing: 5 and 19 August 2013
Date of Decision on Costs: 28 October 2013

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DECISION ON COSTS

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1. Following the granting of an ex parte Mareva injunction to the plaintiff on 22 July 2013, I made the following order on 5 August2013, the return date:-

“(1) The ex parte Mareva Injunction granted by DDJ Eric Tam on 22nd July 2013 be continued up to and including 19th August 2013;

(2) The plaintiff to provide particulars, by way of affidavit, as to the identity and capacity of the Notary Public whose signatureand chop (in Arabic) appears in the Affidavit of Mohammed Ali Hassan Ali Merchant;

(3) Costs of this application and of the ex parte application be in the cause; and

(4) The matter to be returnable on 19th August 2013 at 9:30am in Court 6 (with 15 minutes reserved).”

2. The defendant thereafter neither filed any Affidavit evidence nor otherwise challenged the plaintiff’s application herein.

3. Both parties appeared before me on the second return date, 19 August 2013. I was informed at the hearing that the parties had cometo an agreement in relation to which I was asked to make a Consent Order in terms. I made the following Order that day:-

“BY CONSENT, IT IS ORDERED THAT:-

(1) the ex parte Mareva Injunction granted by Deputy District Judge Eric Tam on 22.7.2013 and extended by Deputy District Judge SanjayA. Sakhrani on 5 August 2013 be continued until further order;

(2) the Hongkong and Shanghai Banking Corporation and/or the Hang Seng Bank Limited do release a total sum of USD54,155 or its equivalentHong Kong dollar at the time of payment, plus interest, at judgment rate from 22 July 2013 until full payment from the defendant’saccount(s) with them to the plaintiff;

(3) the costs of and incidental to this Application and of these proceedings to be dealt with by written submissions. The plaintiffto file and serve written submission with 14 days from today. The defendant to file and serve reply within 14 days thereafter. Plaintiffto file and serve written submission in reply, if necessary, within 14 days thereafter.

(4) Upon satisfaction of paragraph 2 above and the defendant’s payment of the plaintiff’s costs (if so ordered) pursuant to paragraph3 above:-

(4.1) the ex-parte Mareva Injunction granted by Deputy District Jude Eric Tam on 22 July 2013 and extended by Deputy District JudgeSanjay A Sakhrani on 5 August 2013 and on this date be discharged; and

(4.2) Leave to the plaintiff to discontinue these proceedings with no order as to costs.

(5) The hearing scheduled on 29 August 2013 be vacated with liberty to restore.”

(the “19 August Order”)

4. As can be seen from the 19 August Order, the defendant has agreed that the funds (the subject of the injunction) were to be releasedto the plaintiff, thereby determining the dispute between the parties save for the issue as to costs which is to be dealt with here.

5. I have now received the written submissions on costs from both the plaintiff and defendant as directed at paragraph 3 of the 19August Order.

6. The plaintiff asks for its “costs of these proceedings, including costs of all applications to be taxed, on a party and partybasis, if not agreed.” By “costs of these proceedings, including costs of all applications” I take this to mean that the plaintiffis asking for its costs, as per paragraph 3 of the 19 August Order namely, “costs of and incidental to this Application, and costsof these proceedings.”

7. On the other hand, the defendant asks for no order as to costs.

The plaintiff’s position

8. I have no difficulty with understanding the plaintiff’s submission which appears to be a straightforward one – it has succeededand seeks the corresponding costs.

The defendant’s position

9. As for the defendant’s position on costs, however, the basis of this appears at §2 of its written submission, namely:-

(a) there was no need for an ex parte application for a Mareva injunction as there was no real risk of dissipation of assets; and

(b) the plaintiff’s ex parte application was deficient in that there was material non-disclosure and failure to make full andfrank disclosure.

10. There are, immediately, two difficulties with this submission.

11. First, it ignores the fact that, as per paragraph 1 of the 19 August Order, the parties consented to extend the Mareva injunction (granted on 22 July 2013 and extended on 5 August 2013) until further order. This must mean that,far from complaining about the injunction (which the defendant now seeks to do) the parties agreed to its continuation.

12. Second, the defendant is seeking to raise points (i.e. no real risk of dissipation of assets, no full and frank disclosure and materialnon disclosure) that should have been raised earlier, and at the latest on 19 August 2013, and in the proper way, if that was howit chose to proceed rather than entering into a Consent Order that had the contrary effect.

13. In light of the 19 August Order it is much too late now, during the costs stage, to be raising such points attacking the proprietyof the injunction itself. No point was ever taken when it could have been so taken.

14. As a result, I simply ignore these grounds as a basis to grant costs as sought by the defendant. In the absence of these grounds,there is no other basis on which the costs order sought by the plaintiff has been challenged by the defendant.

15. Even without any challenge by the defendant, I am of the view that it would be wrong to keep the plaintiff out of its costs in viewof what has transpired in these proceedings, which I do not need to repeat but which I have considered fully.

16. Accordingly, I decline to accede to the defendant’s request that there should be no order as to costs.

Conclusion

17. On the above analysis, I am satisfied that the plaintiff is entitled to its costs. I award costs of and incidental to this applicationand costs of this action to the plaintiff, to be taxed on a party and party basis, if not agreed.

Summary assessment

18. The plaintiff seeks a summary assessment of its costs and for such assessment to be done by way of written submissions. I considerthis to be a sensible suggestion even though I have not heard the defendant in relation to this request.

19. Although the plaintiff has suggested longer periods for the parties to file and serve their respective written submissions on theassessment of costs, I do not believe such to be necessary. I accordingly direct that:-

(1) the plaintiff is to file and serve its Statement of Costs for Summary Assessment within 7 days of today’s date;

(2) the defendant to file and serve its submissions in response (if any) within 7 days thereafter; and

(3) the plaintiff to file and serve its submissions in reply (in any) within 3 days thereafter.

( Sanjay A Sakhrani )
Deputy District Judge

Mr Fung Chi Wai, of Boase, Cohen & Collins, for the plaintiff

Mr Minju Kim, instructed by Cheung & Lee, for the defendant