LEUNG TUNG HOI AND ANOTHER v. LAI YIP DYEING FACTORY LTD AND OTHERS

LEUNG TUNG HOI AND ANOTHER v. LAI YIP DYEING FACTORY LTD AND OTHERS

The application for a wasted costs inquiry was dismissed: applicants failed to establish the clear, cogent evidence necessary to justify an inquiry under Order 62 r8; legal professional privilege and lack of evidence prevented fair investigation and required giving solicitors the benefit of doubt; proportionality and the court's broad discretion under Ma So So and Medcalf weigh against proceeding; prior appellate treatment of the derivative claim reinforced that the claim raised serious questions and did not demonstrate solicitor misconduct; accordingly no inquiry ordered and applicants ordered to pay costs.

Citation
[2023] HKCFI 1732
Parties
1st Plaintiff (hca 1084/2011); 3rd Defendant (hca 447/2018): Michael Yap; 2nd Plaintiff (hca 1084/2011): Ekim Management Limited; 1st Defendant (hca 1084/2011); 1st Defendant (hca 447/2018): Lai Yip Dyeing Factory Limited; 2nd Defendant (hca 1084/2011); 1st Plaintiff (hca 447/2018): Leung Tung Hoi; 3rd Defendant (hca 1084/2011); 2nd Plaintiff (hca 447/2018): Lee Cheuk Kwon; 4th Defendant (hca 1084/2011): Ricky Tse Wing Chiu; 2nd Defendant (hca 447/2018): Yip Chi Moun Dennis
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
13 July 2023
Case Number
HCA447/2018
Procedural Posture
Civil (commercial/company Litigation) / Application for Wasted Costs Order Made at Commencement of Trial; Decision Delivered 13 July 2023
Outcome
Application dismissed
Legal Topics
Wasted Costs Orders, Legal Professional Privilege, Summary Jurisdiction, Derivative Action Leave, Limitation, Abuse of Process
Source Language
EN
Civil Procedure Costs Company Law Professional Negligence Civil Litigation Wasted Costs Orders Legal Professional Privilege Summary Jurisdiction +3 more

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Parties

Michael Yap

1st Plaintiff (hca 1084/2011); 3rd Defendant (hca 447/2018)

Ekim Management Limited

2nd Plaintiff (hca 1084/2011)

Lai Yip Dyeing Factory Limited

1st Defendant (hca 1084/2011); 1st Defendant (hca 447/2018)

Leung Tung Hoi

2nd Defendant (hca 1084/2011); 1st Plaintiff (hca 447/2018)

Lee Cheuk Kwon

3rd Defendant (hca 1084/2011); 2nd Plaintiff (hca 447/2018)

Ricky Tse Wing Chiu

4th Defendant (hca 1084/2011)

Yip Chi Moun Dennis

2nd Defendant (hca 447/2018)

Procedural Posture

Civil (commercial/company Litigation) / Application for Wasted Costs Order Made at Commencement of Trial; Decision Delivered 13 July 2023

Legal Issues

  1. 1 Whether to order inquiry under Order 62 r8 into responsibility for wasted costs
  2. 2 Whether applicants established a prima facie case sufficient to trigger an inquiry
  3. 3 Whether late withdrawal of claims/counterclaims permits inference of improper purpose or tactical delay

Ratio Decidendi

The application for a wasted costs inquiry was dismissed: applicants failed to establish the clear, cogent evidence necessary to justify an inquiry under Order 62 r8; legal professional privilege and lack of evidence prevented fair investigation and required giving solicitors the benefit of doubt; proportionality and the court's broad discretion under Ma So So and Medcalf weigh against proceeding; prior appellate treatment of the derivative claim reinforced that the claim raised serious questions and did not demonstrate solicitor misconduct; accordingly no inquiry ordered and applicants ordered to pay costs.

Court Disposition

Application dismissed

Orders

  • Application dismissed
  • Costs of the Application to be paid by the Winning Parties to the Losing Parties, to be taxed if not agreed