WING HONG CONSTRUCTION LTD v. HUI CHI YUNG AND OTHERS

WING HONG CONSTRUCTION LTD v. HUI CHI YUNG AND OTHERS

The court refused to make a non‑party costs order against the liquidators because the high threshold for such an exceptional order was not met: there was no established impropriety or bad faith, the claim was not wholly misconceived, the liquidators had creditor approval and acted in the interests of creditors, they...

Source-derived case information.

Citation
[2022] HKCFI 639
Parties
Plaintiff (in Compulsory Liquidation): Wing Hong Construction Limited; 1st Defendant: Hui Chi Yung; 2nd Defendant: Hui Chi Yang; 3rd Defendant: Yiu Kai Yeuk (Raphael); 4th Defendant: China National Culture Group Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
11 March 2022
Case Number
HCA1423/2015
Procedural Posture
Company/insolvency Litigation (liquidator Brought Claim) / Post‑trial Costs Decision Following Liability Judgment; Application Under O.62 R.6 a for Non‑party Costs
Outcome
Liquidators joined as parties for costs purposes only; Non‑Party Costs Summons dismissed; Plaintiff ordered to pay Defendants' costs including trial on a party and party basis with certificate for two counsel, to be taxed if not agreed; no order as to costs of this hearing.
Legal Topics
Non‑party Costs, Liquidator Liability, Security for Costs, Joinder for Costs Purposes, Apportionment of Costs
Source Language
en
Civil Procedure Company Law Insolvency Costs Non‑party Costs Liquidator Liability Security for Costs Joinder for Costs Purposes +1 more

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Parties

Wing Hong Construction Limited

Plaintiff (in Compulsory Liquidation)

Hui Chi Yung

1st Defendant

Hui Chi Yang

2nd Defendant

Yiu Kai Yeuk (Raphael)

3rd Defendant

China National Culture Group Limited

4th Defendant

Procedural Posture

Company/insolvency Litigation (liquidator Brought Claim) / Post‑trial Costs Decision Following Liability Judgment; Application Under O.62 R.6 a for Non‑party Costs

Legal Issues

  1. 1 Whether a non‑party costs order may be made against liquidators under s.52A and O.62 r.6A
  2. 2 Whether impropriety or bad faith is a necessary precondition to order non‑party costs against liquidators
  3. 3 Whether the liquidators were the 'real parties' or self‑interested funders of the Action

Ratio Decidendi

The court refused to make a non‑party costs order against the liquidators because the high threshold for such an exceptional order was not met: there was no established impropriety or bad faith, the claim was not wholly misconceived, the liquidators had creditor approval and acted in the interests of creditors, they were not 'real parties' in the sense of self‑interested commercial funders, and the existence of security for costs was a material discretionary reason against imposing non‑party liability; accordingly the liquidators were joined for costs purposes only and the Non‑Party Costs Summons was dismissed.

Court Disposition

Liquidators joined as parties for costs purposes only; Non‑Party Costs Summons dismissed; Plaintiff ordered to pay Defendants' costs including trial on a party and party basis with certificate for two counsel, to be taxed if not agreed; no order as to costs of this hearing.

Orders

  • The Liquidators be joined as parties to the Action for costs purposes only.
  • The Non‑Party Costs Summons dated 25 January 2021 is dismissed save as to joinder.