Cheng Jui Lung Kris and Another v. Perfect Best Ltd.

CACV 79/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 79 OF 1999

(ON APPEAL FROM HCA 1347 OF 1998)

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D E C I S I O N

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Rogers, J.A. :

1. This is a case where I have to say, somewhat reluctantly, I have come to the conclusion that I ought to order security for costs.

2. It was an Order 14 application in a conveyancing matter and it came before the learned Recorder. After a careful judgment, the learned Recorder gave judgment in favour of the Plaintiff notwithstanding severe strictures on the conduct of the Plaintiffs and a clear appreciation by the Recorder that the Plaintiffs were seeking to make use of a legal technicality to get themselves out of a contract which they had solemnly entered and which they now found was not to their benefit.

3. In those circumstances, I have no doubt that the learned Recorder gave very careful consideration to all the arguments that were put in front of him on behalf of the Defendant and it is clear, to my mind, that if he could have found in the Defendant's favour, he would have done.

4. On the appeal, Mr. Li is manfully arguing a new point and I make no comment on that point save to say that, it seems to me, it still remains a difficult case. Although I do say this, this is an Order 14 application and if a Defendant can show an arguable case, then it will get leave to defend. It may be on conditions but this may not be a case for conditions in any event. The onus on a Defendant in an Order 14 proceedings is not high and therefore at this stage, I would simply content myself with saying that the Defendant's case is difficult but until the argument has been heard, I would not rule it out of Court nor hold it unarguable.

5. Last week, the Plaintiffs filed evidence that the Defendant is merely a two-dollar company and since nothing else is known about it, they surmise that it may not be good for the costs. They have not done any search in respect of the Defendant but in the circumstances of this case, that may not be surprising. If the only assets of the Defendant was this property in question and it was a property holding company holding only this property, that property having been sold, there would be grounds for belief that the Defendant may not have much, if any, assets. No evidence has been filed on behalf of the Defendant and neither has anything been filed which would indicate that this appeal will be stifled if security for costs were ordered.

6. Having regard to the fact that this is an Order 14 case which must be clear on its face in order to obtain an Order 14 judgment and having regard to the submission made on behalf of the Plaintiffs that their case is overwhelmingly strong, I approach the question of quantum of security on the basis that this case would not merit more than a senior junior counsel and not merit leading senior counsel.

7. In those circumstances, I would be prepared to order a sum of $200,000 to be paid as security.

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It is ordered

1. that the Appellant do on or before the 14th June 1999 give security to answer costs in case any shall be awarded to be paid by the Appellant to the Respondents by making lodgment in Court of the sum of $200,000 by cash or bankers draft or by the provision of a Bank guarantee of the like amount which guarantee shall have been approved by the Registrar.

And until such lodgment be made and notice thereof given to the Registrar and to the Solicitors for the Respondents (such notice to be given on the same day as the lodgment is made) all proceedings in the said Appeal are to be stayed.

2. that in default of the Appellant making such lodgment as aforesaid within the time specified above or within such further time as the Court may for special reasons allow, the said appeal do (upon the Solicitor for the Respondents certifying such default to the Registrar) stand dismissed out of this Court without further Order.

3. that in the event that the Appeal is dismissed in accordance in the circumstances provided for above the Appellant do pay to the Respondents their costs occasioned by the said Appeal such costs to be taxed.

And that the costs of this application be costs in the Appeal.