HUI YIN SANG AND OTHERS v. TSOI PING KWAN AND OTHERS

CACV 208/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 208 OF 2011

(ON APPEAL FROM HCA NO. 392 OF 2008)

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J U D G M E N T 

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Hon Fok JA (giving the Judgment of the Court):

1.  The 1^st and 2^nd defendants seek leave to appeal against the judgment of this Court dated 19 April 2012 dismissing their appeal against the Decision of the Judge below refusing their application for security for costs against the 3^rd and 4^th plaintiffs.

2.  The application is made pursuant to s. 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance (Cap. 484) on the grounds that the questions involved in the appeal are ones which, by reason of their great general or public importance or otherwise, ought to be submitted to the Court of Final Appeal for decision.

3.  As a preliminary observation, the intended appeal is an interlocutory appeal and it is therefore important to keep in mind the observation of the Appeal Committee in CSAV Group (Hong Kong) Ltd v Jamshed Safdar (2007) 10 HKCFAR 629 that interlocutory appeals to the Court of Final Appeal on procedural issues are rare and exceptional.

4.  The notice of motion dated 14 May 2012 identifies three proposed questions of great general or public importance.

5.  Question 1 poses a question as to the approach for determining ordinary residence of a non-trading company for the purposes of RHC O.23 r.1(1)(a) but it is not in dispute (and was not in issue either in the appeal or before the Judge below) that the applicable test is the test of central management and control.

6.  For the reasons given in paragraphs 40 to 44 of our Judgment, we do not think the purpose of an offshore investment holding vehicle is a matter of unique significance which should take precedence over other factors for the purpose of determining whether the company is ordinarily resident in Hong Kong within O.23 r.1(1)(a) and, for those reasons, we do not think Question 2 is reasonably arguable.

7.  Similarly, for the reasons given in paragraphs 45 to 47 of our Judgment, we do not think the proposition underlying Question 3, namely that the Court should give weight to the factors identified in Lindsay J’s second proposition in Re Little Olympian Each Ways Ltd [1995] 1 WLR 560 depending on whether they accorded with the underlying purpose of O.23, is reasonably arguable.

8.  It is also relevant, in the context of the suggested great general and public importance of Questions 2 and 3, to bear in mind that the perceived anomaly identified in paragraph 50 of our Judgment has now been addressed by s. 905 of the new Companies Ordinance (Ord. No. 28 of 2012), gazetted on 10 August 2012.  Upon its coming into effect, that provision will enable a defendant to seek security for costs from a company incorporated outside Hong Kong, even if under the central management and control test it would be regarded as resident in Hong Kong.

9.  Insofar as the application is made on the “or otherwise” ground, it is well-established that the grant of leave on this ground is an exceptional course: see, e.g. Chao Keh Lung v Don Xia (2004) 7 HKCFAR 260 at §9.  Save in rare cases, it will generally be a matter for the Appeal Committee to determine if leave should be given on this ground.

10.  For these reasons, we dismiss the application.