XU ZHIQIANG AND OTHERS v. NG KWOK ON AND OTHERS

XU ZHIQIANG AND OTHERS v. NG KWOK ON AND OTHERS

The Master’s indemnity costs order was affirmed because the plaintiffs discontinued serious fraud allegations shortly before the security for costs hearing without adequate explanation, conduct that was tactical and caused wasted time and expense; these special and unusual features justified indemnity costs on the facts, and the appeal was dismissed with indemnity costs for the 2nd and 3rd defendants assessed at HK$169,900.

Citation
[2018] HKCFI 274
Parties
1st Plaintiff: Xu Zhiqiang; 2nd Plaintiff: Digital Currency Operation Co. Limited; 3rd Plaintiff: Company Registration Number 2220691 Limited; 1st Defendant: Ng Kwok On; 2nd Defendant: Chu Ka Chung; 3rd Defendant: Tam Yuk Kwan
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
9 February 2018
Case Number
HCA1551/2016
Procedural Posture
Civil: Appeal Against Costs Order / Appeal (de Novo) in High Court; Judgment on Appeal
Outcome
Appeal dismissed; Master Wong’s indemnity costs order affirmed
Legal Topics
Indemnity Costs, Discontinuance, Security for Costs, Allegations of Fraud, Costs Taxation
Source Language
EN
Civil Procedure Costs Employment Law Fraud Indemnity Costs Discontinuance Security for Costs Allegations of Fraud +1 more

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Parties

Xu Zhiqiang

1st Plaintiff

Digital Currency Operation Co. Limited

2nd Plaintiff

Company Registration Number 2220691 Limited

3rd Plaintiff

Ng Kwok On

1st Defendant

Chu Ka Chung

2nd Defendant

Tam Yuk Kwan

3rd Defendant

Procedural Posture

Civil: Appeal Against Costs Order / Appeal (de Novo) in High Court; Judgment on Appeal

Legal Issues

  1. 1 Whether indemnity costs should be awarded where a plaintiff discontinues an action containing allegations of fraud
  2. 2 Whether discontinuance alone justifies an order for indemnity costs or a court must first find the fraud allegations unfounded
  3. 3 What weight to give to tactical conduct, timing of discontinuance and absence of explanation in awarding indemnity costs

Ratio Decidendi

The Master’s indemnity costs order was affirmed because the plaintiffs discontinued serious fraud allegations shortly before the security for costs hearing without adequate explanation, conduct that was tactical and caused wasted time and expense; these special and unusual features justified indemnity costs on the facts, and the appeal was dismissed with indemnity costs for the 2nd and 3rd defendants assessed at HK$169,900.

Court Disposition

Appeal dismissed; Master Wong’s indemnity costs order affirmed

Orders

  • Appeal dismissed
  • Costs of the appeal (including the hearing on 16 January 2018) to the 2nd and 3rd Defendants on an indemnity basis with certificate for counsel, to be assessed summarily