PETER JOHN DODDS v. HOWARD SCHULTZ & ASSOCIATES (ASIA) LTD

HCA3170/2002
& HCA858/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NOS.3170 OF 2002 AND 858 OF 2003

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(Consolidated pursuant to the Order of Master Levy dated 1 April 2003)

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D E C I S I O N

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1. This is an application by the plaintiff to stay the proceedings pending the determination of the plaintiff's legal aid application.

2. The present summons was issued on 29 June 2004 under section 15 of the Legal Aid Ordinance, Cap.91. It is said to be an application to extend the statutory stay under section 15.

3. Briefly, the events leading to the present application are as follows. On 3 April 2004, leave was granted to set the action down for trial. On 7 April 2004, the defendant applied by summons for security for costs against the plaintiff, who is resident abroad. On 19 April 2004, the plaintiff applied for Legal Aid. The stay imposed under section 15 of the Legal Aid Ordinance expired on 31 May 2004. On 29 June 2004, the plaintiff issued the present summons.

4. The defendant's summons for security for costs was initially returnable on 23 April 2004. By consent, it was adjourned and is now fixed for hearing on 22 July 2004.

5. The materials before the court show that the plaintiff's legal aid application is still being processed. It appears that the Legal Aid Department had sought various information from the plaintiff relating to, among other matters, the income of his business, probably for the purpose of assessing his means.

6. Primarily, the plaintiff's present application for stay is made on one basis. It is said that if these proceedings were not stayed pending the determination of his legal aid application, there would be grave injustice and substantial consequences to the plaintiff because of the defendant's security for costs application.

7. Submission has been made that if the plaintiff were to be granted legal aid, then the defendant's concern and, in turn, the request for security for costs would be taken care of. I pause here to observe that this question of the risk, or lack of it, of the defendant's costs not being met is one that should be more appropriately considered in the context of the security for costs application. It is, for instance, open to the plaintiff to either seek an adjournment of the security for costs application, or to raise this as a matter for consideration in the security for costs application.

To ask for a general and infinite stay of the proceedings on such basis is, in my view, going too far and is not justified.

8. In the course of submissions, references have been made to the Hong Kong Civil Procedure 2004 Vol. 2 para. O1/15/1 at p.987, and Lee Shiu Ming v. Yeo Hiap Seng (Hong Kong) Ltd [1994] 1 HKC 18 at 23E, where the Court of Appeal emphasized that the purpose of the statutory stay under section 15 of the Legal Aid Ordinance is to do justice between the parties.

9. In the present context, it is said that without extending the stay, the plaintiff will suffer grave injustice in that he will be shut out of the action. What must be noted is that the plaintiff is not contending that if these proceedings were not stayed, he is financially incapable of continuing prosecuting the action, or to properly contest the security for costs application. As I understand Miss Cheng's submissions, when she suggests that the plaintiff may be shut out of the action, she is saying that the plaintiff may not be in a position to meet an order for security for costs, if one were to be made.

10. Effectively, the plaintiff is hoping to meet the defendant's security for costs by arguing that he is legally aided, so that there is no risk of the defendant's costs not being met in the event that the plaintiff were to fail in his claim. This point is manifested by the fact that the plaintiff had proceeded to set the action down for trial and also fixed the trial date during the currency of the statutory stay and before the determination of the legal aid application. In my view, this is not the injustice envisaged by the Court of Appeal in Lee Shiu Ming v. Yeo Hiap Seng (Hong Kong) Ltd at 23E. Indeed, Litton JA observes (at 23I) that it will be appropriate for the court to intervene by lifting the stay if it appears that the application for legal aid is to obtain an advantage through the statutory stay. The basis for the present application simply falls outside the objective of section 15. It is not a proper use of the statutory stay.

11. I also agree with the observation that the infinite character of the stay now applied for is unsatisfactory. The plaintiff says that it is not due to his fault. Additionally, Miss Cheng argues that there is no prejudice to the defendant in that what is outstanding is just the summons for security for costs and the trial, and that by staying the proceedings, the defendant would not have to incur further costs pending the determination of the security for costs application. It is also said that the defendant's summons will only be delayed and not put to an end.

12. It is no doubt correct that the summons for security for costs will not fall away even if the proceedings are stayed. But what is plain is that the hearing on 22 July 2004 will have to be adjourned. Security for costs application by its very nature ought to be disposed of timely since it has an important impact on the parties' conduct of the case. Any adjournment should therefore be closely scrutinized. In the present case, the trial is only four months away. There is obviously a need on all parties to make preparations for the trial. The question of whether the costs incurred can be recovered from the opponent falls to be an important consideration. Given that there is no indication of when the outcome of the plaintiff's legal aid application will be available, the defendant will be put in a difficult position of not knowing whether to incur costs for the trial, including whether to deliver brief to counsel and the like. In the circumstances, it cannot be said that a stay of the proceedings for an infinite period poses no prejudice to the defendant.

13. Having regard to the above matters, the plaintiff's application is dismissed. Costs should follow event. The costs of the application are to be paid by the plaintiff to the defendant in any event.