SUEN SHU TAI v. TAM FUNG TAI

FAMV No 3 of 2015

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 3 OF 2015 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL FROM CACV NO 187 OF 2013)

_____________________

_____________________

_____________________

REASONS FOR DECISION

_____________________

Mr Justice Tang PJ:

1.  This litigation concerns two properties which were transferred by the plaintiff to her daughter, the defendant, in 1999.  The dispute between the parties was over whether they were gifts.  Recorder H Wong SC decided in favour of the plaintiff and made a declaration that the properties were held by the defendant on a resulting trust for the plaintiff.

2.  The defendant’s appeal to the Court of Appeal was dismissed on 4 July 2014.  However, because the properties were valued in excess of $1 million[1], as the law then stood, the defendant was entitled to appeal to this court as of right.  Accordingly, on 14 January 2015, the appeal committee granted leave to appeal on condition that the defendant provides $400,000 as security for the costs of the appeal.

3.  Whilst the plaintiff has always been legally aided, the defendant was only granted legal aid for her appeal to this court on 28 January 2015.  By summons dated 2 February 2015, the defendant asked that security for costs be dispensed with because she has been granted legal aid.

4.  In this appeal, if only the plaintiff were on legal aid, and this court makes a cost order in her favour, the costs would be paid by the Director of Legal aid, s 16C (1)(b) of Legal Aid Ordinance, Cap 91.  However, since both the plaintiff and the defendant are on legal aid, s 16C(1)(c) applies, such that neither would be liable to costs in excess of their contribution, and there is no provision for the Director to pay the plaintiff her costs, s 16C(1)(b).  Presumably, this was because it was thought that in a typical case the Director would be paying himself.

5.  The complication in this case is that, if the plaintiff remains successful in this court, she would have recovered two properties, in which event, since the total contribution by her and the defendant[2] are likely to be “less than the net liability of the Director” on the plaintiff’s account, “a sum equal to the deficiency shall be a first charge” on the properties, s 18A(1)(b).  In other words, she would be worse off than if the defendant was not on legal aid, although the defendant was the appellant.  I believe this is the result of an unintended lacuna. 

6.  I have to decide whether the order for security for costs should be rescinded.  If the defendant alone was on legal aid, security for costs would not be necessary because of s 16C(1)(b)(i).  But, here, without the security, the bulk of her costs in the appeal will very likely be borne by her properties.

7.  Under s 18B, if an aided person is ordered to provide security, the Director may provide such security.  The defendant is appealing concurrent findings.  She has been granted legal aid presumably because the Director thinks she has a good arguable appeal.  Whether that is so remains to be seen.  Section 18B enables the Director to provide the security ordered, so there is no question of stifling the appeal. I see no reason why the order should be rescinded at the possible expense of the plaintiff.

8.  Insofar as Mr Chu for the defendant relied on merits, that apparently depended on an argument which was not advanced at first instance or in the court of appeal.  Of course, I have not had the benefit of full argument, but my present view is that if this application depended on the merits of the appeal, I would not have been disposed to rescind the order for security on that basis. 

9.  For these reasons, I dismissed the defendant’s summons with costs in any event. The parties’ own costs are to be taxed under the legal aid regulations.