CHRISTINE RUTH ONG CHAI HOON AND OTHERS v. LAM KIN CHUNG AND OTHERS

HCA 1793/2012

[2019] HKCFI 2772

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1793 OF 2012

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DECISION

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Introduction

1.  By a summons filed on 26 July 2019 (“the Summons”), the 1^st and 4^th Defendants (“Ds”) applied for “further security for costs” in the sum of HKD 8,780,000 against the Plaintiffs (“Ps”) on the ground that all of Ps were foreigners residing in Singapore.  Ps had previously paid HKD 1,300,000 into Court as security for costs on a without prejudice basis.  Ps contested the Summons and asked for its dismissal. 

2.  I heard the Summons substantively today.  My decision is to (1) dismiss the Summons; and (2) order Ds to pay the costs of the Summons, including all costs reserved, summarily assessed by me with Certificate for Counsel at HKD 176,074 to Ps forthwith (“the Decision”).

3.  My reasons for the Decision are as follows. 

Background Facts

4.  Ps’ case was that they were all ordinary Singaporean residents who became victims of a fraudulent scheme ran by, inter alios, Ds (“the Fraudulent Scheme”).  They claimed financial losses adding up to HKD 23,815,514.75 and SGD 100,000, plus interests and costs. 

5.  Ds’ case was that they did nothing wrong. Leading Counsel was involved in drafting the Defence. 

Ds’ Submissions

6.  Mr Lawrence Ngai, Counsel for Ds, submitted, inter alia, that (1) there was no dispute Ps were all residing outside of this jurisdiction; (2) Ps did not contest liability to pay security for costs previously, and that was an indication they knew they were liable; (3) there was no suggestion that ordering security would stifle Ps’ claim; (4) Ps’ claim was complex so that its merits could not be assessed in a summary manner; (5) the 1^st Defendant (“D1”) had, via his solicitor, deposed to his own previous experience trying to enforce costs orders in Singapore and that showed enforcement of costs orders in this case against Ps in Singapore would be difficult; and (6) given the complexity and seriousness of Ps’ allegation and the substantial amount of damages claimed, Ds’ costs estimation, made on the basis that a Senior Counsel would be instructed to act for them, was reasonable.

Ps’ Submissions

7.  Ms Sharon Yuen, Counsel for Ps, submitted, inter alia, that (1) the Summons should be dismissed outright for the simple reason that there was a regime for reciprocal enforcement of judgments between Singapore, an English-speaking common law jurisdiction, and Hong Kong, so that the enforcement of costs orders in this action in Singapore, if necessary, should present no difficulty at all; (2) the evidence against Ds was extremely strong and Ps would have obtained summary judgment but for the fraud exception set out in Order 14 of the RHC; and (3) the quantum of security sought by Ps was in any case excessive, there being no reason why a Senior Counsel should be instructed to lead a senior junior with 25 years of experience. 

My View

8.  The Summons should be dismissed, for evidential reasons. 

9.  As the learned Recorder Horace Wong SC observed in Lim Yi Shenn v Wong Yuen Yee [2012] 3 HKLRD 505, the burden is always on the party seeking security for costs to show that it is just reasonable and fair to order security.  It cannot be assumed that once it is established a plaintiff is located overseas, an order for security would necessarily follow. Each application must be considered on its own facts.  The paucity of evidence on the difficulties of enforcement alleged to be in existence can be fatal to an application for security.  Whether the evidence adduced is sufficient or not depends on the facts of each case. 

10.  In our present case, the only affidavit evidence on the alleged difficulties of enforcing costs orders in Singapore was in (1) paragraphs 34 to 39 of the 3^rd Affirmation of Ho Kim Hung filed herein on 30 July 2019; and also (2) paragraphs 24 to 27 of the Affirmation of Chan Hiu Tung filed herein on 23 October 2019, where it was suggested that in a separate and unrelated Hong Kong defamation action involving D1 (HCA 1999 / 2012) (“the Unrelated Action”), D1 obtained final judgment in Hong Kong on 27 January 2017 (“the Unrelated Judgment”) and sought to enforce it in Singapore.  It was said that registration of the Unrelated Judgment in the High Court of Singapore was only completed by D1’s Singaporean lawyers on 28 November 2017, and D1 only managed to get the debtor in question declared bankrupt on 19 July 2018. 

11.  In my view, that kind of evidence came nowhere near the kind of evidence required to prove difficulties.  There was no evidence before me that the timeframe deposed to was normal or typical in Singapore, and there was no evidence before me as to whether D1 could have enforced the Unrelated Judgment in Singapore quicker had he been more diligent.  In any case, it is highly questionable whether being able to declare a judgment debtor bankrupt within 18 months of getting the judgment in question can be described as a genuine “enforcement difficulty”.  For this reason alone, I should dismiss the Summons. 

12.  Since I cannot be sure whether Ds may attempt to make a fresh application for further security for costs with better evidence in the future, I would refrain from commenting on other matters raised by Ms Yuen, such as the merits of the action itself, or the quantum of security sought.

Costs

13.  Costs should follow the event.  Ps were the winner vis-à-vis the Summons.  The costs of the Summons should be paid by Ds to Ps. 

14.  On the question of Certificate for Counsel, in my judgment it was reasonable, necessary and proper for both sides to engage Counsel to argue the Summons, given the quantum of security sought.  Both Counsel had been extremely helpful to this Court.

15.  On the quantum of costs vis-à-vis the Summons, Ps claimed HKD 184,374.  Pursuant to paragraphs 13 & 14 of Practice Direction 14.3, I examined each item in Ps’ Statement of Costs, and also the final figure. 

16.  I would only allow HKD 2,900 for Item D4, given that Ps had already engaged Ms Yuen, a competent Counsel, to attend this hearing, and it was unnecessary for Ps’ solicitors to send a qualified staff to accompany Ms Yuen.  This hearing was also shorter than originally anticipated. All other sums claimed are reasonable and proper. 

17.  Taking a broad-brush approach in assessing quantum of costs, I consider a total figure of HKD 176,074 to be fair and reasonable. 

Final Remarks

18.  I do thank both Counsel for their most able assistance.