Hua She Asset Management (Shanghai) Co Ltd v Kei Kin Hung & Ors

Where a hearing is adjourned at the last minute because the parties failed to identify an inadequate time estimate and one party also caused procedural problems requiring relief from sanctions, responsibility for the wasted costs should be allocated according to each party’s contribution.

The substantive merits of the underlying application are generally irrelevant to the costs of the adjournment, except insofar as they bear tangentially on the issue. A party primarily responsible for the adjournment may nevertheless recover a proportion of its costs where other parties contributed to the wasted court time or caused separate procedural expense.

The claimant applied for the costs of an adjournment of a three-day hearing concerning an application to make charging orders absolute. The hearing required substantially more time than estimated because of additional parties, Mandarin-language evidence and applications for relief from sanctions.

The claimant had raised authenticity and sham-document issues late and applied for relief from sanctions shortly before the hearing. The second, third and fourth respondents had also failed to engage promptly with the court or claimant about the inadequate time estimate. The fifth, sixth and seventh respondents had limited roles and no direct responsibility for cross-examination or the claimant’s sanctions application.

The issue was how the costs of and occasioned by the adjournment should be allocated.

1. Merits irrelevant to adjournment costs. The claimant’s submission that costs should be reserved until the substantive application was decided was rejected. The question was responsibility for the adjournment, which was separate from the substantive question of beneficial ownership.
2. Primary responsibility. The claimant bore primary responsibility because it had failed to serve authenticity notices in time, issued its relief-from-sanctions application only two weeks before the hearing, and required that application to be heard at the start of the trial.
3. Contributory responsibility. The second, third and fourth respondents also bore responsibility for failing to address the plainly inadequate time estimate sufficiently early. That justified reducing their recovery.
4. Orders. The second and third respondents were awarded 75% of their costs of and occasioned by the adjournment, payable by the claimant and assessed on the standard basis. The fourth respondent was awarded 50%, reflecting both her responsibility concerning the time estimate and the costs of her own relief-from-sanctions application. The fifth, sixth and seventh respondents were awarded their costs in full because their limited legal-submission roles gave them no direct responsibility for the wasted hearing time.