YEUNG BEE LEE, BILLY v. HONG KONG HOUSING AUTHORITY

CACV 195 & 196/2002

CACV 195/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 195 OF 2002

(ON APPEAL FROM HCA NO. 1425 OF 2001)

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J U D G M E N T

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Hon Rogers VP:

1. I agree. I would only add that I would echo what Deputy Judge To said in paragraph 51 of his judgment of 21 March 2002. It is most unfortunate that Mr Yeung has been lead to consider he has a claim which is wholly unsustainable. It is a matter of regret that this must have caused stress as well as considerable financial loss. Nevertheless, there is no alternative but to dismiss this application and make the order proposed.

Hon Le Pichon JA:

2. This is an application by the plaintiff to set aside the order dated 5 February 2003 made by the Chief Judge whereby the plaintiff was ordered to provide $165,000 by way of security for the defendants' costs in CACV 195 and CACV 196 of 2002 within 28 days of the order, failing which the appeals would be dismissed.

3. The substantive appeals brought by the plaintiff are from orders made by Deputy High Court Judge To on 21 March 2002 in two sets of proceedings brought by the plaintiff as follows:

(A) HCMP 6606/1999

The order (1) dismissed the plaintiff's application to set aside (i) a settlement agreement dated 16 August 2000 made between him and the Hong Kong Housing Authority (HKHA) on the ground of fraud, concealment of important facts and duress (ii) a waiver letter dated 24 August 2000 from the plaintiff to the Director of Housing; and (2) permanently stayed HCA 6606 of 1999 with costs to the defendant.

(B) HCA 1425/2001

The order (1) struck out the plaintiff's statement of claim in HCA 1425/2001 dated 28 March 2001; and (2) dismissed the action with costs to the defendant.

Background

4. The plaintiff was one of the residents of Rennie's Mill. He had been living in a cottage there ("the cottage") since before 1961. Like the other residents, he had been served a notice to quit by the HKHA in 1995. In 1996, some of the residents challenged the validity of the notices to quit in judicial review proceedings. Sears J consolidated the three applications for judicial review (the "consolidated proceedings") to which the plaintiff was not a party and held that the residents had lost their right to remain at Rennie's Mill indefinitely but that they were entitled to compensation or damages which would be a matter for further determination.

5. On 12 January 1998, the plaintiff issued an originating summons under HCMP No. 114 of 1998 seeking an order that the plaintiff be eligible to claim damages/compensation and that he be joined with the applicants in the consolidated proceedings in a hearing fixed for 9 March 1998 on assessment of damages in respect of the cottage. Sears J ordered that the plaintiff and other residents like him who had issued summons or originating summonses 'be treated as new applicants in the judicial review'.

6. On 19 March 1998, in a further hearing when the applicants of the consolidated proceedings sought a determination of eligibility and damages, Sears J set out the criteria determining eligibility and a formula for the calculation of damages ("the formula").

7. When the plaintiff's summons in HCMP No. 114 came on for hearing in September 1998, the judge rejected the plaintiff's claim for $25 million and ruled that the plaintiff should receive compensation of $593,473.42, being one-third of the amount calculated in accordance with the formula less the HKHA's costs of $60,000. This was so because the plaintiff was believed to be only one of three household members eligible to receive compensation.

8. The plaintiff lodged an appeal (CACV No. 282 of 1998) against the order of Sears J on 26 November 1998, seeking a reassessment of compensation. Pending the hearing of the appeal, on 5 February 1999, the Housing Department informed the plaintiff that a net sum of $533,473.42, being the amount due to the plaintiff under Sears J's order of 16 September 1998, was available for collection. As will become apparent, the plaintiff did not collect this sum until much later - November 1999.

9. On 27 September 1999, the Court of Appeal dismissed the plaintiff's appeal in CACV 282 of 1998 and held that the plaintiff and the other appellants heard at the same time "never had any valid claim to 'damages' (or any other form of monetary compensation) at all".

10. Notwithstanding the Court of Appeal's judgment in CACV 282 of 1998, on 26 October 1999, the plaintiff issued the proceedings in HCMP 6606/1999 for an order that he was entitled to the entire amount of compensation in respect of the cottage as the other family members were not eligible for compensation. As a result of those proceedings, the HKHA carried out an investigation and concluded that, indeed, the plaintiff was the only household member of the cottage eligible for the entire compensation. A recalculation had to be done based on the formula. Pending this recalculation, on 18 November 1999, the plaintiff collected the sum of $533,473.42 due under the judgment of September 1998 in HCMP 114 from the Housing Department. The recalculation resulted in a slightly lower figure of $1,774,442.48 compared to the original assessment of $1,780,420.26.

11. On 16 August 2000, the plaintiff entered into a settlement agreement with the HKHA under which the HKHA agreed to pay the plaintiff $1,774,442.48 less $533,479.42 already paid to him and the $60,000 costs and the plaintiff agreed to withdraw the proceedings in HCMP 6606/1999 and waive other claims he might have against the HKHA and the Government. Payment was duly made on 24 August 2000 and the plaintiff signed an undertaking waiving all future claims against the Government and the HKHA.

12. Contrary to the settlement agreement, not only did the plaintiff not withdraw HCMP 6606/1999, on 28 March 2001, the plaintiff issued a writ against the Government (HCA 1425/2001) and took out an originating summons against the HKHA (HCMP No. 1731 of 2001) seeking, essentially, identical relief (but as against different defendants), for damages for loss of alleged rights relating to the cottage. In May 2001, he filed a notice of intention to proceed with HCMP 6606/1999.

13. On 8 October 2001, the Government took out a summons to strike out HCA 1425/2001 and HCMP 1731/2001 (being proceedings for compensation in respect of alleged rights of the plaintiff relating to the cottage). The HKHA also took out a summons to stay HCMP 6606/1999.

14. On 25 October 2001, the plaintiff sought leave to withdraw HCMP 1731/2001 and for an order in HCMP 6606/1999 that the settlement agreement and the waiver letter be set aside.

15. The summonses referred to in paragraphs 13 and 14 above came before Deputy Judge To on 8 January 2002. On the same day, he made an order by consent that the plaintiff be at liberty to withdraw the proceedings in HCMP 1731/2001 with costs against him on an indemnity basis. There is no appeal against that order. The other summonses culminated in the orders referred to in paragraph 3 above.

The order for security for costs

16. The Chief Judge heard the application by the Government in CACV 195 (being an appeal from HCA 1425/2001) and the HKHA in CACV 196 (being an appeal from HKMP 6606/1999), (collectively "the defendants") for security for costs and ordered security in the amount of $165,000 covering both appeals. The application had been made on two grounds: (1) that the plaintiff was in financial difficulties; (2) there is no merit in the appeals.

Impecuniosity

17. If an appellant would be unable through impecuniosity to pay the costs of the appeal, if unsuccessful, that alone is sufficient ground without proof of any other special circumstances to order security for costs. That is settled practice. See Harlock v Ashberry (1881) 19 Ch D 84 at 85. The rationale for this practice is explained in paragraph 59/10/28 of 2002 Hong Kong Civil Procedure in the passage cited by the Chief Judge in his judgment dated 5 February 2003: in exercising its discretion, the court takes into account the fact that the appellant has already had the issue concerned determined in the court below so that, prima facie, it is an injustice to a respondent to allow an appeal to proceed without security for costs being furnished in circumstances where the respondent will be unable to enforce any costs order against the appellant should the appeal fail. In this court Mr Yeung complained that there had never been a trial of his action so that there has not been a determination of the 'issue concerned'. However, Mr Yeung failed to appreciate that a summary determination of his action is nonetheless a determination for this purpose. There is thus no substance in that complaint.

18. In the judgment of the deputy judge dated 21 March 2002, reference was made to the fact that Mr Yeung has spent the compensation he received in legal costs in the various actions which has led him into greater debt. Before us, Mr Yeung effectively acknowledged as much: he stated that he did have assets but which the Government has 'demolished'. Presumably, that was a reference to the cottage. He requested that this court reduce the amount of security for costs to $100,000 which he said he was in a position to pay.

19. It is to be noted that the Chief Judge did not base his decision to order security for costs on the plaintiff's financial circumstances alone. In determining how the discretion vested in him ought to be exercised, the Chief Judge took into consideration the merits of the appeals. To this I now turn.

Merits of the appeals

CACV 195 (HCA 1425/2001)

20. This action which was started in March 2001 related to the cottage and the interest (if any) Mr Yeung has in relation to it. These were precisely the matters that had been raised and determined in HCMP 114/1998 and CACV 282. Mr Yeung sought to argue before the deputy judge that whereas the Court of Appeal in CACV 282 had decided the case on the basis of the 1961 communications from the Government, he was relying on events between 1950 and 1961 for his claim. It was not suggested that this evidence was not available to him when CACV 282 was decided. The deputy judge was of the view that the court was being asked to determine an identical question. The deputy judge also rejected the plaintiff's contention that his action was based on a private law claim whereas the earlier proceedings were in respect of a public law claim. So far as the deputy judge was concerned, the matter was res judicata and on that basis, he struck out HCA 1425/2001.

21. Before us, Mr Yeung re-iterated his contention of a distinction between public law and private law claims. But, as a general rule, it would be contrary to public policy and an abuse of the process of the court for a plaintiff complaining of a public authority's infringement of his public law rights to seek redress by ordinary action since all the remedies for the infringement of rights protected by public law could be obtained on an application for judicial review. See D'Reilly v Mackman [1983] 2 AC 237 at 285 D-E. There is thus no merit in the point.

22. In the circumstances, the Chief Judge's conclusion that the plaintiff was seeking to relitigate the issues which had already been finally disposed of by a competent court is unassailable. The issue of the plaintiff's interest in the cottage had been finally disposed of in CACV 282 of 1998 which was an appeal from the proceedings originally instituted by the plaintiff in HCMP 114/1998. In my view, there is virtually no prospect of the plaintiff succeeding in overturning the deputy judge's decision in this regard.

CACV 196 (HCMP 6606/1999)

23. The basis upon which Mr Yeung sought to set aside the settlement agreement and the undertaking was that they were not supported by consideration and were obtained by fraud, concealment of important facts and duress. The deputy judge's finding was that in view of the Court of Appeal's decision in CACV 282, the Housing Authority was under no obligation to pay the balance of the compensation ascertained under the formula. Therefore the Director of Housing's promise to pay the balance constituted good consideration moving from the Housing Authority to secure Mr Yeung's promise to provide the undertaking and withdraw the proceedings. As for the allegations of fraud, concealment and duress, the deputy judge found that the settlement agreement had been entered into by Mr Yeung out of his own free will and upon proper legal advice. It was fully supported by good consideration and had not been initiated by fraud, concealment or duress or any other vitiating factors.

24. These findings pose insurmountable obstacles for any appellant. One can only conclude that the prospects of Mr Yeung succeeding in overturning the deputy judge's order made in HCMP 6606/1999 are remote.

Conclusion

25. The skeleton bill shows the estimated costs of both appeals to be over $179,000. Having regard to the plaintiff's financial circumstances and the merits of the appeals, the order for security for costs in the sum of $165,000 cannot, on any view, be said to be unwarranted or a wrong exercise of discretion. The prospects of the plaintiff succeeding in his substantive appeals are virtually non-existent for the reasons set out above. That being so, it would not be right to allow the appeal to go forward without some measure of protection for the defendants. Accordingly, the application to set aside the decision of the Chief Judge is refused. I would extend the time for meeting the order for security for costs to 14 days from the date of this judgment. I would also make an order nisi that the costs of this application be to the defendants.