SIAO MIU HUA SUED BY MA SIU YEE JOANNA HER NEXT FRIEND v. WU CHING KUEN THE ADMINISTRATRIX OF THE ESTATE OF MA CHIU HOI SANFORD, DECEASED

CACV 57/2024, [2025] HKCA 1130

On Appeal From [2024] HKCFI 232

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 57 OF 2024

(ON APPEAL FROM HCA NO. 1396 OF 2016)

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DECISION

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Hon Anthony Chan JA (giving the Decision of the Court)  :

1.  This is the Plaintiff’s security for costs application in respect of the Defendant’s appeal against the Judgment of K Yeung J dated 19 January 2024 by which it was adjudged, inter alia, that Mr Ma Chiu Hoi Sanford (“Deceased”)  during his lifetime or his Estate (“Estate”), which was (and is)  represented by the Defendant as its Administratrix, did not have any interest in various assets which were referred to as “Subject Assets”. It was held that the Subject Assets belonged to the Plaintiff, the mother of the Deceased.

2.  The Notice of Appeal of the Defendant was filed on 16 February 2024.  A Supplementary Notice of Appeal was filed on 5 July 2024.  The present application was filed on 6 March 2025 by way of a Summons seeking security in the sum of HK$700,000.  It is supported by an affirmation of the Plaintiff’s next friend filed on the same date.  On 3 April 2025, the Plaintiff’s written submissions were lodged in support of this application.  By another Summons filed on 15 April 2025 (“Amendment Summons”), the Plaintiff seeks to make minor amendment to the previous Summons. 

3.  The Defendant has been acting in person since about 11 June 2025 (when her former solicitors had complied with the requirements under Order 67, rule 6(1)  of the Rules of the High Court, Cap 4A (“RHC”)  pursuant to the Order of Cheung JA dated 22 May 2025). 

4.  Contrary to the Directions of the Registrar of Civil Appeal dated 7 April 2025, no affidavit of opposition has been filed by the Defendant, nor did she lodge any submissions in opposition to this application.

5.  We take the view that it is appropriate to determine this application without a hearing and on the basis of written submissions only pursuant to Order 59, rule 14A(1)  of the RHC. 

6.  The primary ground on which the Plaintiff relies for this application is the impecuniosity of the Estate.  Plaintiff also submits that the Defendant’s failure or refusal to comply with the Judge’s Orders supports this application.  Further, the Defendant’s appeal has no reasonable prospect of success.

7.  Pursuant to Order 59, rule 10(5)  of the RHC, the court may, in special circumstances, order that security be given for the costs of an appeal as may be just. 

8.  In Chung Kau v Hong Kong Housing Authority & Ors [2004] 2 HKLRD 650 at [14], the court stated the approach to an application for security for costs of an appeal :

“(1)  The fact that an appellant is impecunious does not lead automatically to an order that security for costs must be provided. The court is entitled to consider other relevant factors such as the strength of the appeal to determine whether or not it would be just to order that security for costs be provided.

(2)  That said, as a matter of practice, once an applicant for security can demonstrate that impecuniosity (or some other factor such as difficulty or expense in enforcing a costs order)  exists, while the court retains an overall discretion whether or not to make the order, it would then generally be up to the party resisting the application for security to demonstrate countervailing factors which would militate against such an order being made. A common countervailing factor to resist applications for security are the merits of an appeal.

(3)  On a consideration of the merits of the appeal, while a detailed examination is not required (or desirable, even if possible on the materials before the court at this stage), the court should form some sort of preliminary, even instinctive, view. Where the merits appear to go strongly one way or the other, this may by itself be a decisive factor. Thus, an appeal which is very strong would often be a very good reason not to order security. The converse of course also applies. A hopeless appeal may even by itself justify an order for security. However, if the court takes the view that the appeal could really go either way, then generally it will look to the existence of any other factors to tilt the balance, in the absence of which security will be ordered. This is of course on the assumption that a factor such as impecuniosity has already been demonstrated.

(4)  As I have said above, the overriding consideration for the court is to consider, as the rule requires, whether ‘special’ (not exceptional)  circumstances exist making it ‘just’ to order security.”

9.  As indicated in the dicta, it is for the party seeking security for costs to demonstrate the impecuniosity on the appellant’s part. 

10.  The Plaintiff relies on the Schedule of Assets and Liabilities annexed to the Letters of Administration in relation to the Estate, which was dated 26 March 2014.  Excluding the Subject Assets, the assets of the Estate (it had no liabilities at the time)  were as follows :

(1)  Cash at bank in the amount of about HK$400,000;

(2)  500 shares in Risepark Ltd;

(3)  The Deceased’s interest in the unadministrated estate of his father. 

11.  The shares in Risepark Ltd were subsequently distributed to the Defendant (wife of the Deceased)  and the Deceased’s son on 7 November 2014.  The Deceased’s interest in his father’s estate was distributed to the Estate in the sum of about HK$1.17 million on about 27 June 2018. 

12.  According to the evidence of the Plaintiff, these are all the identifiable assets of the Estate.  The information available is not up-to-date.  It is unknown, but doubtful, whether the cash and cash distribution still remain with the Estate.

13.  There are liabilities of the Estate :

(1)  The costs of the action below which were awarded against the Estate and have been taxed at just over HK$3 million;

(2)  There is an order for the Defendant to account for the income and/or profits received or derived from the use of a landed property (“Property”)  which was one of the Subject Assets.  The Defendant has failed to provide the account.  The Plaintiff estimates that a sum of approximately HK$2.3 million is due under the account; 

(3)  There are two further orders for costs against the Defendant in the total sum of HK$80,000 which arose from a hearing on 24 October 2024 brought about by the failure of the Defendant to comply with the Judgment.

14.  These liabilities remain unsatisfied.  In light of the above evidence, there is at least a prima facie case that the Estate is impecunious. 

15.  The Defendant’s conduct of these proceedings tends to fortify the Plaintiff’s case on the impecuniosity of the Estate :

(1)  The Defendant has failed to comply with the Judgment, eg, she has failed to transfer the title of the Property to the Plaintiff.

(2)  When the non-compliance was raised by the Plaintiff’s solicitors with those of the Defendant, the Defendant’s solicitors indicated that they had instructions to apply for a stay of execution pending appeal, but no step has been taken in that regard. 

(3)  At the hearing on 24 October 2024, the Defendant’s solicitors informed the court that they had no instructions to make submissions on behalf of the Defendant.

(4)  The orders of the court made on 24 October 2024 were again ignored by the Defendant.

(5)  No response was made by the Defendant’s solicitors to the Plaintiff’s request dated 24 February 2025 for payment of security for costs of the appeal.

(6)  As noted above, no evidence in opposition or submissions was filed to resist this application.

(7)  Apparently, the Defendant had stopped instructing her solicitors resulting in the order dated 22 May 2025 by which those solicitors would cease to act for her. 

16.  In light of these circumstances, we are satisfied that a case has been made out for ordering security for costs of this appeal. 

17.  It should be said that we are alive to the delay by the Plaintiff in making this application.  This application was made nearly 13 months after the filing of the Notice of Appeal.  The Plaintiff explained that the impetus of this application is that after possession of the Property was recovered, it was discovered in around 14 January 2025 that the Defendant had not paid the rates for the Property from January 2024 and the management fees since July 2024.  The discovery had galvanised the view that the Estate is impecunious.  After the Defendant had failed to respond to the request for security, this application was made.  Taking a holistic view of these matters, we do not believe that the delay, whilst not to be endorsed by the court, is not fatal to this application.

18.  As regards the merits of the appeal, all that needs to be said is that it is an appeal against the findings of fact by the court below.  It is well-established that there is a heavy burden on the appellant for such an appeal.  We see no countervailing factor which may militate against ordering security for costs in this case. 

19.  In respect of the quantum of security, we take the view that the sum of HK$500,000 (which includes the costs of this application)  would be appropriate. 

20.  For the reasons aforesaid, security for costs of this appeal in the sum of HK$500,000 is to paid into court by the Defendant within 21 days from the date of this Decision.  We make an order in terms of the Amendment Summons.  The terms of paragraph 1 of the Amended Summons for security of costs of this appeal should be modified as aforesaid.  We make an order in terms of paragraphs 2 and 3 of the Amended Summons.  Costs of this application be in the cause of the appeal.