Temple Chambers

Wishing you a wonderful festive season and a prosperous new year from all of us at Temple Chambers!

Developing cross-border arbitration talent and services Jonathan Chang SC was invited to speak at an inaugural national course (全国涉外仲裁人才培训班) organised by the Ministry of Justice of the People’s Republic of China at the China University of Political Science and Law (中国政法大学) in Beijing. The intensive two-week programme aims to cultivate capacity and talent with regard to arbitration with an international perspective, a solid understanding of international rules and practices, and the skills to provide high-quality, efficient and professional services in the cross-border legal services market. During the course, Jonathan delivered a presentation titled “Arbitration in Hong Kong: Principles and Practice.” Over 120 participants took part, including senior judges and lawyers from Mainland China, in-house general counsel from major corporations, and university professors. The course concluded with a mock arbitration in which Jonathan played the role of the Presiding Arbitrator.

Guidance on Interpretation of Multi-Party Costs Orders Costs orders are commonly made in favour of or against multiple parties. When faced with such a costs order, questions may arise as to whether the relevant parties’ entitlement or liability for costs is joint and several. In Ng Yiu Chi and Ng Kwok Piu Philip [2024] HKCFI 3552, the Court provided useful guidance on the interpretation of such costs orders. The applicant and the respondent were siblings involved in multiple sets of proceedings between their family members. The respondent later presented a statutory demand against the applicant based on the costs orders made in those proceedings, including two costs orders which were made (i) against the applicant and other unsuccessful parties and (ii) in favour of the respondent and other successful parties. The applicant sought to set aside the statutory demand on the following grounds: (1) Her liability under the costs orders is not joint and several, and she should not be liable for the full amount of the costs awarded under the relevant costs orders (1st ground); and (2) The respondent is only entitled only to claim the costs which he had personally incurred in the proceedings, but not the costs incurred by the other successful parties (2nd ground). Winnie Tsui J dismissed the setting aside application. Regarding the 1st ground, the judge held that: (1) Where a costs order is made against more than one paying party, the general starting point is that the liability is joint and several, except in respect of the separate case or cause raised by one of the losing parties, in which case, the losing party alone is solely liable for the costs incurred by the winning party in meeting the separate case or cause. (2) The starting point is not to be elevated to the status of a hard and fast principle. Rather, it reflects a more general principle of costs, namely, it being at the discretion of the Court taking into consideration all circumstances, including who is the winner and the parties’ conduct. (3) On the facts, the proceedings in question were in substance between two rival camps of family members, and the applicant was in one of the two camps. She had taken up the same position and run the same case as others in her camp and is liable for the costs of the successful camp. Regarding the 2nd ground, the judge held that, where more than one person jointly instruct a solicitor in the same case, then as between them and the solicitor, they are jointly and severally liable for his costs, absent any evidence to the contrary. It is for the applicant to adduce such evidence in the present case, but she has not done so. The full judgement can be viewed here: https://lnkd.in/gWGPZDJ9. Eugene Kwan appeared for the Applicant, instructed by Kenneth Poon & Co.

Opening ceremony of the Hong Kong International Arbitration Centre (HKIAC) Beijing Representative Office The opening ceremony of the Hong Kong International Arbitration Centre (HKIAC) Beijing Representative Office took place on 16 December 2024, with Rimsky Yuen SC and Victor Dawes SC attending along with other guests including the Secretary for Justice, Paul Lam SC. The HKIAC is the sole appointing authority under the Arbitration Ordinance. It is responsible for appointing arbitrators and determining the number of arbitrators when the parties to a dispute fail to reach agreement. It is also one of the seven designated arbitral institutions under the Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong Special Administrative Region. As Co-Chairman of the HKIAC, Rimsky delivered the ceremony opening address, while Victor, as HKIAC Council Member, shared his insights on "The Unique Role of HKSAR’s International Arbitration Regime under the 'One Country, Two Systems' Principle." With 25 arbitrator members and several pioneering Guangdong-Hong Kong-Macao Greater Bay Area (GBA)-qualified lawyers, we are dedicated to providing top-notch legal services to businesses and individuals from Hong Kong and mainland China and supporting their growth in the region.

A Family Gathering Temple Chambers was delighted to host the annual Private Client and Family Law Drinks at The China Club on 12 December 2024. Over 80 solicitors attended and let their hair down in ‘tis joyful season to enjoy some *merriness pending suit*. Temple Chambers is the premier family and matrimonial law set in Hong Kong, where over 50 members have acted in related cases. It possesses an unrivalled depth and breadth of expertise in this area, from the most experienced silks to the brightest juniors. We house more family and matrimonial practitioners than any other set in Hong Kong, who have been in the most significant matrimonial cases and family disputes for many years and continue to be sought after in high-stakes and high-conflict cases.   Together with all of you, we look forward to making further *stellar contribution* to the jurisprudence and dispute resolution in the coming years.  

Recognition of ‘Want of Authority’ as unjust factor in claims brought against indirect recipients   BCPE Diamond Holdco SRL v Sunwe Plastic HK Limited & Ors [2024] HKCFI 3370 addresses two fundamental issues central to the law of unjust enrichment: (1) whether the defendants’ enrichment was ‘at the expense of the plaintiff’, and (2) whether their enrichment was ‘unjust’. The decision involved a victim of cyber fraud who successfully brought claims against indirect recipients of misappropriated assets.   On the first issue, Mr Recorder Eugene Fung SC applied the ‘direct transfer rule’ laid down by the UK Supreme Court in ITC v Revenue & Customs Commissioners [2018] AC 275. The effect of this is that the ‘at the expense of’ requirement will generally only be met where the plaintiff has directly provided a benefit to the defendant. Although ITC recognises a number of scenarios as being ‘equivalent to a direct transfer’, the burden lies squarely on the plaintiff to specifically plead and prove the availability of those exceptions, particularly in an Order 14 application. On the facts, the Plaintiff successfully invoked the tracing exception, applying the presumptions in Re Hallett’s Estate and Clayton’s Case.   On the second issue, the Court made clear that while ‘mistake’ may have been the correct basis to show why a direct recipient’s enrichment was ‘unjust’, the Plaintiff could not have been labouring under any mistaken belief regarding indirect recipients as the Plaintiff was simply unaware of their existence. In this regard, the Court gave express recognition to ‘want of authority’ as the proper unjust factor. The Court surveyed a number of English, Australian and New Zealand authorities on claims against indirect recipients in reaching this conclusion.   The full judgment can be viewed here: https://lnkd.in/gQjHt6xD.   Adrian Kwan, instructed by Deacons, acted for the Plaintiff.   Ian Yu, instructed by Bobby Tse & Co, acted for the 5th Defendant. 

Singing Praises   Our heartiest congratulations to all who participated in this year’s Recreation and Sports Club for Professional Bodies (RSCPB) Singing Competition.   The RSCPB’s main objects include the fostering of ties and friendship amongst Hong Kong professional bodies, including the Hong Kong Bar Association, the Hong Kong Dental Association, the Hong Kong Institute of Certified Public Accountants (HKICPA), The Hong Kong Institute of Architects, The Hong Kong Medical Association, The Hong Kong Institute of Surveyors, and The Law Society of Hong Kong.   In a non-appealable (!) decision, our very own Richard Khaw SC, representing the Hong Kong Bar Association, took home the prize for best solo singer of the evening, performing Jacky Cheung's 偷心 (Stolen Heart).     Looking forward to next year!

Court of First Instance grants bankruptcy order on a US$389m debt; clarifies approach when debtor opposes the petition on the ground that the debt is fully secured The Court of First Instance granted a bankruptcy order against a Debtor in respect of an undisputed debt of US$389 million in Re Ma Ting Hoi Albert [2024] HKCFI 3460. The underlying debt concerned investment loans advanced by the Petitioner to the Debtor to fund a Taiwanese property development project (“A7 Project”). The debt was secured by a share charge over the top holding company which owns the A7 Project (“Security”). At the time the statutory demand was issued, the Petitioner estimated that the Security was worth some US$26.9 million. Prompted by discoveries that the Security had been cut off from the A7 Project which came to light after the statutory demand was issued, the Petitioner amended the Petition and revised her estimate of the value of the Security to nil. The Debtor argued that the Amended Petition should be dismissed, since (a) the statutory demand and the Amended Petition referred to a different figure, there was no jurisdiction to grant a bankruptcy order; and (b) he has, in any event, raised a real issue that the value of the Security (based upon optimistic valuations of the A7 Project) had exceeded the full value of the petitioning debt. DHCJ Roxanne Ismail SC rejected both arguments. On the first argument, the Court held that: (a) having regard to the statutory provisions read as a whole, “the debt” as referred to in s.6(2) of the Bankruptcy Ordinance refers to the same obligation giving rise to the liability in question, even if the quantum may change between the date of the statutory demand and the date of the petition; (b) in circumstances where a misstatement of the amount of the debt is not a fundamental matter going to jurisdiction, it follows that it cannot be right that the Court has no jurisdiction to make a bankruptcy order only because the amount stated as outstanding in the petition was different from the amount claimed in the statutory demand; and (c) in any event, there can be no prejudice to the Debtor where there is no evidence that the Debtor would have paid any of the debt had the amount claimed in the statutory demand been the higher amount claimed in the Amended Petition. On the second argument, the Court held that on a proper construction of the Bankruptcy Rules and understanding of the case authorities, the Court would not inquire into the correctness of the estimate of the value of the security provided that it was genuine, unless the Debtor proves on a balance of probabilities (as opposed to merely showing a real issue) that the value of the security equals or exceeds the full amount of the debt. The full judgment can be viewed here: https://lnkd.in/gxiukbde. Bernard Man SC and Martin Ho, instructed by DLA Piper Hong Kong, for the Petitioner.

Landmark Court of Final Appeal decision upholds equal statutory inheritance rights for same sex couples In Li Yik Ho v Secretary for Justice [2024] HKCFA 30, the Court of Final Appeal upheld equal inheritance rights under the Intestates’ Estates Ordinance (Cap. 73) (“IEO”) and Inheritance (Provision for Family and Dependants) Ordinance (Cap. 481) (“IPO”) for surviving spouses of same-sex couples who were validly married overseas. Under the IEO and IPO, the surviving spouse of a married heterosexual couple would be guaranteed to inherit part of the deceased’s estate on intestacy and may further receive “reasonable financial provision” as his or her “wife” or “husband”, even if the deceased did not make a will to provide for the spouse. In contrast, the surviving spouse of a same-sex couple married overseas did not qualify as a “husband” or “wife” for the purposes of the IEO or IPO. Accordingly, he or she would not be entitled to inherit under the IEO, or make a claim for financial provision under the IPO, as the surviving spouse of the deceased. In holding that the differential treatment did not pass proportionality review and was therefore discriminatory and unconstitutional, the Court of Final Appeal found that same-sex couples who were married overseas were comparable to married heterosexual couples for the purposes of the IEO and IPO, and that the differential treatment under challenge did not pursue a legitimate aim of having coherent definitions of marriage across legislation which “touch on the subject of marriage”.   Importantly for future equality-based challenges across a range of possible contexts, the CFA also indicated, more broadly, that “coherence across legislative schemes” is unlikely to be a legitimate aim capable of justifying prima facie discriminatory treatment. The full judgment is available here: https://lnkd.in/gCNXBPay. Monica Carss-Frisk KC, Abraham Chan SC, and Denise Souza appeared for the Appellant, the Secretary for Justice. Tim Otty KC, Jin Pao SC, and Azan Marwah, instructed by Daly & Associates, appeared for Mr. Li, the Respondent.  

Challenging terrain – High Court quashes environmental study of proposed Fanling Golf Course housing development Hong Kong Golf Club v Director of Environmental Protection & Anor [2024] HKCFI 1279 The High Court has given judgment on the Hong Kong Golf Club’s judicial review against the environmental impact assessment (EIA) for a proposed public housing project to be built over part of the ‘Old Course’ at Fanling, quashing the EIA report. In a 229-page judgment, Coleman J found that the EIA report was flawed in its assessment of the environmental impacts of the proposed project across a range of areas studied: -         old and valuable trees -         tree compensation -         hydrological impact on critically endangered Chinese Swamp Cypress trees -         cultural heritage -         bats and moths -         waste The Court held the report did not meet the requirements of the Technical Memorandum and the Study Brief issued under the Environmental Impact Assessment Ordinance (Cap. 499). The Court also ruled that the procedure used was unfair. The Director of Environmental Protection failed to undertake public consultation on additional information supplied by the project proponent – the Civil Engineering and Development Department – after the conclusion of the statutory consultation period. The Director also erred by failing to consider the Club’s responses to that additional information. The Court further found that the conditions imposed on the acceptance of the EIA report were unlawful and undermined the Director’s approval of the report. The Court rejected the Club’s challenges relating to the assessments of sewage, noise impact, land contamination, shading, and air quality. The full judgment is available here: https://lnkd.in/gayDPgeD. Benjamin Yu SC and Tim Parker acted for the Hong Kong Golf Club, instructed by Johnson Stokes & Master. Rimsky Yuen SC, Anna Chow, and Martin Ho appeared for the Director of Environmental Protection, instructed by the Department of Justice. Jin Pao SC, Leticia Tang, and Zenith Chan appeared for the Civil Engineering and Development Department, also instructed by the Department of Justice.