The CFI has granted a non-party costs order against an unrelated company that funded litigation, and joined it for the purposes of indemnity costs: Hydrotech Waterproofing Solutions Ltd v Shun Yuen Construction Co Ltd [2023] HKCFI 601. 

Hydrotech was a sub-sub-contractor which went unpaid for construction works, after its sub-contractor went into liquidation.  It had claimed against the main contractor Shun Yuen for payment, but lost at trial.  In cross examination, Hydrotech’s witness Mr Mo had accepted that he / his company Hop Shing had funded the claim with a view to recovering $3 million in related fees it was owed in turn by Hydrotech.  The Court ruled that in view of this agreement it was ‘fair and just’ for Hop Shing to pay its ‘share of the costs’ of the ‘litigation which ultimately failed’ [28].

Indemnity costs were also awarded for failure to beat a sanctioned payment [33]-[34].  The Court accepted submissions that Hop Shing should be joined and liable to pay costs on the indemnity basis, as it had understood and accepted that it and Hydrotech would ’stand or fall together’ in the litigation [36].

Phillip Rompotis, Josh Baker and MinterEllison acted for the successful defendant.