QIYANG LTD AND OTHERS v. MEI LI NEW ENERGY LTD AND OTHERS

QIYANG LTD AND OTHERS v. MEI LI NEW ENERGY LTD AND OTHERS

The judge found CLCMC's conduct was not 'improper or unreasonable' within the high threshold for a wasted costs order: CLCMC acted on apparently regular documents and on advice of counsel, raised arguable legal points, and causation was lacking for certain costs (notably adjournment costs caused by the Trustees). Consequently a wasted costs order was refused; instead an order nisi was made allocating the costs of CLCMC's show-cause hearing to Listco and no order as between CLCMC/Listco and the Trustees.

Citation
QIYANG LTD AND OTHERS v. MEI LI NEW ENERGY LTD AND OTHERS
Parties
1st Plaintiff: Qiyang Limited; 2nd Plaintiff: Thunder Sky Energy Technology Limited; 3rd Plaintiff (listco): FDG Electric Vehicles Limited (formerly Sinopoly Battery Limited); 1st Defendant: Mei Li New Energy Limited; 2nd Defendant (bankrupt): Chung Hing Ka (also known as Chung Winston); Solicitors / Showing Cause Respondent: CL Chow & Macksion Chan; Applicants/supporting Parties (trustees): Joint and several trustees of the estate of the 2nd Defendant
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
20 April 2017
Case Number
HCA420/2011
Procedural Posture
Wasted Costs Application Arising From Prior Corporate/shareholder and Bankruptcy Proceedings / Show Cause Hearing Following Decision (post Decision Hearing on Solicitor Liability)
Outcome
Wasted costs order against CL Chow & Macksion Chan refused; order nisi that costs of CLCMC's showing cause (with certificates for two counsel) to be borne by Listco; no order as to costs between CLCMC/Listco and the Trustees.
Legal Topics
Wasted Costs, Warranty of Authority, Authority of Solicitors, Vesting of Shares on Bankruptcy, Breach of Trust, Reliance on Counsel, Adjournment and Causation
Source Language
EN
Civil Procedure Costs Company Law Insolvency Trusts Professional Conduct/ethics Wasted Costs Warranty of Authority +5 more

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Parties

Qiyang Limited

1st Plaintiff

Thunder Sky Energy Technology Limited

2nd Plaintiff

FDG Electric Vehicles Limited (formerly Sinopoly Battery Limited)

3rd Plaintiff (listco)

Mei Li New Energy Limited

1st Defendant

Chung Hing Ka (also known as Chung Winston)

2nd Defendant (bankrupt)

CL Chow & Macksion Chan

Solicitors / Showing Cause Respondent

Joint and several trustees of the estate of the 2nd Defendant

Applicants/supporting Parties (trustees)

Procedural Posture

Wasted Costs Application Arising From Prior Corporate/shareholder and Bankruptcy Proceedings / Show Cause Hearing Following Decision (post Decision Hearing on Solicitor Liability)

Legal Issues

  1. 1 Whether CL Chow & Macksion Chan acted without authority in representing Mei Li
  2. 2 Whether a wasted costs order should be made under section 52A HCO and Order 62 rr 8 and 8A
  3. 3 Whether the solicitor's conduct was improper or unreasonable (fault) and causally responsible for wasted costs

Ratio Decidendi

The judge found CLCMC's conduct was not 'improper or unreasonable' within the high threshold for a wasted costs order: CLCMC acted on apparently regular documents and on advice of counsel, raised arguable legal points, and causation was lacking for certain costs (notably adjournment costs caused by the Trustees). Consequently a wasted costs order was refused; instead an order nisi was made allocating the costs of CLCMC's show-cause hearing to Listco and no order as between CLCMC/Listco and the Trustees.

Court Disposition

Wasted costs order against CL Chow & Macksion Chan refused; order nisi that costs of CLCMC's showing cause (with certificates for two counsel) to be borne by Listco; no order as to costs between CLCMC/Listco and the Trustees.

Orders

  • Declined to make a wasted costs order against CL Chow & Macksion Chan
  • Order nisi that costs of CLCMC's showing cause with certificates for two counsel be borne by the 3rd Plaintiff (Listco)