A A

B DCCJ607/2007 B

C IN THE DISTRICT COURT OF THE C

HONG KONG SPECIAL ADMINISTRATIVE REGION

D D
CIVIL ACTION NO. 607 OF 2007
E E

F F
BETWEEN
G G

TECHNICON ENGINEERING LIMITED Plaintiff

H H

and
I I
CHAN LEE KWOK Defendant
J TRADING AS LEWA & COMPANY J

K K

L Before: H H Judge Mimmie Chan in Chambers (Open to the public) L

Date of Hearing: 28 September 2007

M M
Date of Decision: 28 September 2007
N N

O DECISION O

P P
1. The Defendant seeks costs of the action and of two summonses to strike
Q Q
out and to amend on an indemnity basis. It is clear from the case of Choi

R
Yee Chun v Bond Star Development Ltd. [1997] HKLRD 1327 that the R
circumstances in which an indemnity award of costs might properly be
S S
made are not restricted to the circumstances such as those described in the

T case of Overseas Trust Bank Limited v Coopers & Lybrand [1991] 1 T

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HKLRD 177. The discretion of the court is unfettered and not to be
B B
affected beyond the requirement that taxation on an indemnity basis must

C be appropriate. C

D D
2. The question in this case is whether reasonable steps could have been

E taken to identify the proper party to be sued and to be named as the E

Defendant in the action commenced. The Writ was commenced on
F F
1 February 2007, naming as the Defendant “Chan Lee-kwok trading as
G Lewa & Company” and not just Lewa & Company. The Statement of G
Claim was filed on 29 March 2007. The Plaintiff claims that it only knew
H H
for the first time from the affirmation of the Defendant filed on 16 May
I 2007 that there are two companies both trading in the name of Lewa & I
Company. However, in the Defence filed on 12 April 2007, the Defendant
J J
pleads that this business was only commenced on 6 February 2007.
K K

3. On being served with the Defence at the latest, if not before the
L L
commencement of the proceedings, the Plaintiff could have made a search
M at the Business Registration Office to verify the date of commencement of M

business and the date of registration of the business of the Defendant. The
N N
Plaintiff alleges that it requires time, after receiving the Defendant’s
O affirmation, to carry out an extensive investigation into the relevant O

projects to verify the correct contracting parties. The projects ranged from
P P
1998 to 2004. It would have been readily apparent that the named
Q Defendant, whose business was only registered on 6 February 2006, could Q

not have entered into the projects in question.

R R

S 4. It is not an unusual situation at all in Hong Kong for companies to be S

registered with the same name. Before issuing the Writ, the Plaintiff’s
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solicitors should have conducted the necessary business registration search
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as any reasonable firm of solicitors would have done to verify the details of
B B
the registration of the business known as Lewa & Company and to compare

C such details, in particular the registered address, with the details from the C
written agreement and the quotations in support of the Plaintiff’s alleged
D D
claim. At the very latest when the Defence was served, these particulars

E should have been checked with the Plaintiff. It was not until one month E
after the filing of the Defence on 12 April that the Defendant applied for
F F
striking-out on 16 May 2007.
G G
5. I do not accept the explanation given as to the time required to verify
H H
the correct contracting party as the information should have been available
I to the Plaintiff’s solicitors by the time of the filing of the Statement of I
Claim on 29 March 2007 at the very latest.
J J

K 6. In these circumstances, I do not see any good reason why the Plaintiff K

should not pay the Defendant’s costs incurred in this action on an

L L
indemnity basis. I have not seen any good reason why the Defendant, a
M separate legal entity to the limited company which is the proper party to the M

contracts in question and who has been unnecessarily dragged into this
N N
litigation, should be out of pocket in relation to these costs incurred. The
O fact that Chan Lee-kwok, who is a director of Lewa Decoration Company O

Limited, had signed some cheques issued by the limited company does not
P P
alter the fact that he is a separate legal entity, and does not make him
Q personally liable to justify an action being commenced against him. Q

R R
7. In my judgment, the circumstances fall within the same category of
S cases such as Paul Ki Ping Ki & others v Oriental Daily Publisher Limited S

& others ( CACV 201/1999, 28th March 2000) and Ho Man Yu v Ngai
T T
Shing Sau (t/a Shing Kee Engineering Company) & others ( HCPI
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A A
332/2004, 15th February 2006). It is appropriate to make an order of costs
B B
on an indemnity basis in this case and I so award.

C C
(Mimmie Chan)
District Judge
D D

E E
Mr D Wong, of Messrs Minter Ellison, for the Plaintiff
F
Mr Enzo Chow, instructed by Yu Hung & Co., for the Defendant F

G G

H H

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J J

K K

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M M

N N

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P P

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