LIEU TSENG VAN v. JIUZHOU DEVELOPMENT CO LTD

CACV 152/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 152 OF 2012

(ON APPEAL FROM HCA NO. 1645 OF 2009)

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BETWEEN

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JUDGMENT

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1.  After a 6-day trial, Deputy High Court Judge Louis Chan ordered the Appellants to repay to the Respondent the Hong Kong dollars equivalent of RMB26 million which had been paid by the Respondent as earnest money.

2.  This is the Respondent's application for security for costs in respect of the Appellants' appeal.  The amount of security sought is HK$800,000.

3.  The Respondent relies on the Appellants' impecuniosity as well as difficulty in enforcing payment as special circumstances for ordering security for costs. It is not necessary for me to consider impecuniosity.  I am prepared to proceed on the basis that the Appellants, or some of them, are not impecunious. 

4.  However, I am satisfied that unless security is ordered, there would be undue delay or expense in enforcing an order for the costs of the appeal. There is much evidence in support and it is sufficient for me to refer only to what Ms Alice Ma, a solicitor for JZD, said in her affirmation of 10 July 2012, in particular, what she said in para 13:

"13.   Similarly, under various costs orders that were due and owing to JZD by the Appellants in HCA 1645/2010 and related court proceedings, Lieu was ordered by the Court to make payment of interim costs. The vast majority of these were only collected after W&G, on behalf of JZD, had to go through long and exhausting steps of having each of the costs bills drafted, challenged, taxed and the costs allocators being demanded, left unpaid, then demanded under statutory demands ('SDs'), with personal service of the SDs always evaded until W&G threatened to serve him openly which would cause him great embarrassment in public with real threat of bankruptcy. No payment was ever made until after the expiry of 21 days and even then, only at the last minute to avoid the presentation of a bankruptcy petition. In fact, JZD has still not yet been able to recover from Lieu the costs of preparing and personally serving various SDs and preparing the bankruptcy petition papers for numerous outstanding costs orders. There is now produced and shown to me tied together and marked 'MLY-5' copies of the demands and SDs which JZD and the Receivers had served on Lieu via W&G and the late payment of amounts thereunder by Lieu."

5.  Mr Kwok, who appears for the Appellants, submitted that security should nevertheless be refused because the Appellants have strong merits in the appeal.  But on the material put before the court, I am unable to express any view on the matter. All I have are basically the judgment and the affirmations in support and in opposition to the application for security for costs.  They are insufficient to enable me to express any view on the merits of the appeal.  So I cannot regard that as a sufficient reason for refusing to order for security in favour of the Respondent. 

6.  Mr Kwok also took issue with the quantum of security sought.  According to the draft bill of costs, the total amount is HK$798,750.  Ms Elizabeth Cheung, for the Respondent, accepts that there are two items on the list which require re-consideration.  It is not easy to decide on quantum when one deals with security for costs.  But given the complexity of the appeal, given the fact that it involves, as Mr Kwok said, HK$30 million, given that the trial had lasted 6 days and that the appeal is expected to last 2 days, I believe security in the sum of HK$650,000 would be well justified.  The amount of security that I will order is HK$650,000 with the usual conditions set out in the summons.