LIN MING v. JOINTA LTD

HCA 866/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 866 OF 2011

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D E C I S I O N

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1.  It seems to me the starting point in this case is that there is an order for security for costs made by Master S Kwang on 5 March 2014 on a summons taken out by the defendant on 20 August 2013. By that order, the master required the plaintiff to pay security in the sum of HK$200,000 into court within 60 days of the date of the order on the ground that the plaintiff is ordinarily resident out of the jurisdiction.

2.  There is no appeal by either party against that order.  The plaintiff did, at one stage, apply for legal aid.  Taking into account the statutory stay of proceedings arising from that application, on the plaintiff’s calculation, the 60-day period imposed in the master’s order lapsed in mid-June 2014.

3.  No security, whether in the form of payment into court or otherwise, has been provided by the plaintiff pursuant to the order. The consequence provided for in that order therefore takes effect, which is that further proceedings in the action be stayed until such time as payment is made, except, however, that the pre-trial review and the trial will not, according to the terms of the order, be adjourned or affected by that stay.

4.  It seems to me it would be contrary to the whole notion of ordering security for costs, if the defendant is required to face the trial without the plaintiff having provided security.  The reason why the master made an order in the form as he did is that, as I read the transcript, he considered that the question of stay of the trial and vacation of the trial dates should be left to the trial judge. 

5.  That appears quite clearly from the transcript of the hearing before the master at page 13 and also from a letter written by the clerk to the master to the parties dated 19 June 2014.  So the master’s intention clearly was not that even if security was not provided, the trial should, in any event, proceed.  The master contemplated that a further application may be made to the court by the defendant if there was default on the part of the plaintiff in complying with the order for security.

6.  And that is the position I am faced with today. The plaintiff has failed to comply with the order for security and the defendant has taken out an application that the pre-trial review and the trial of the action be adjourned sine die and that the trial dates be vacated.  The trial dates are fixed on 26 to 28 August 2014.

7.  As I have already stated, the point of ordering security is to protect the defendant in the event that the plaintiff is unsuccessful and is ordered to pay the defendant’s costs.

8.  The master has already decided that security should be given.  There is no appeal from that decision, so that is not a question I should go into any further.

9.  To say that the trial should nonetheless proceed, in the absence of security being provided, would render the order for security nugatory and negate the protection intended to be given to the defendant.  I think therefore that there is a merit, in principle, in the defendant’s application today.

10.  Mr Leung, who appears on behalf of the plaintiff, complains that the application has been taken late.  The summons was undoubtedly taken out quite late.  It was issued only yesterday, but it was issued at my direction, given pursuant to a letter from the defendant’s solicitors to the court, copied to the plaintiff, effectively making the same application.  The letter was dated 4 July 2014, and was therefore two clear working days before this hearing.

11.  Mr Leung also said that he is placed in some difficulty because those instructing him have not been able to contact the plaintiff.  I do not think that should deter me from dealing with the application now.  First of all, today is the day for the pre-trial review, which has been set down for a long time, with the knowledge of the plaintiff. Further, the plaintiff is the party in default of compliance with the master’s order for security and complaint has already been made by the defendant by letter of 4 July as well as, in fact, a letter to the master dated 17 June, which led to his clerk’s response on 19 June.

12.  We are getting very close to the court vacation and the trial is due to take place in late August this year.  I do not think this matter should be delayed any further because the parties need to be aware of their position in order to prepare themselves for the trial, if necessary. However, I do not think it would be right for me today to make an immediate order that the pre-trial review and the trial of the action be adjourned sine die and to make an immediate order that the trial dates be vacated.  The master has made an order which does not provide for these consequences.

13.  The defendant is effectively seeking an order by way of case management and in order to give effect to the master’s order for security, that as a consequence of the failure to provide security, the trial should be vacated.  In the circumstances, I think it would be fair to order that unless the plaintiff provides security for costs in compliance with the master’s order of 5 March 2014 within 7 days hereof, the trial of this action will be adjourned sine die and the trial dates will be vacated.