LAU CHUNG v. HUI KENG YEE AND ANOTHER

CACV 69/2025, [2026] HKCA 1436

On Appeal From [2025] HKCFI 359

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 69 OF 2025

(ON APPEAL FROM HCA NO 561 OF 2019)

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D E C I S I O N

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Hon Au JA (giving the Decision of the Court):

1.  On 20 March 2026, this court handed down our decision[1] (“the CA Decision”) allowing the 1^st defendant’s (“D1”)’s application for security for costs (“the Security for Costs Application”) in respect of the plaintiff’s (“P”)’s appeal against the judgment of Herbert Au-Yeung J (“the Judge”) dated 21 January 2025[2].

2.  We allowed the application and ordered P to pay into court the sum of HK$500,000 (“the Security”) within 28 days of the CA Decision as security for costs of the appeal.

3.  At [43] of the CA Decision, we further made an order nisi that costs of this application be to D1, to be taxed if not agreed (“the Costs Order Nisi”).

4.  On 9 April 2026, P paid into court the Security pursuant to our order.

5.  By a summons filed on 5 May 2026 (“the Variation Summons”), D1 applies to vary the Costs Order Nisi to the following:

“(1) The order nisi as to costs made at paragraph 43 (‘the Costs Order Nisi’) in the Decision of the Court of Appeal dated 20 March 2026 (‘the Decision’) be varied to the extent that the 1^st Defendant is to have the costs of the 1^st Defendant’s application for security for costs in respect of the Plaintiff’s appeal, which are to be summarily assessed by the Court of Appeal;

(2) The costs of this application to vary the Costs Order Nisi be paid by the Plaintiff to the 1^st Defendant, to be summarily assessed; and

(3)  Leave to granted to the 1^st Defendant to apply for payment out of the amount as summarily assessed by the Court of Appeal in paragraphs (1) and (2) hereinabove, from the sum of HK$500,000 paid into court by the Plaintiff pursuant to paragraph 42(1) of the Decision, in satisfaction of the assessed costs.”

6.  In essence, D1 asks for a summary assessment of costs in lieu of taxed costs pursuant to Order 62, rule 9A(1)(a) of the Rules of the High Court (Cap 4A) (“the RHC”), on the basis that the Security for Costs Application is an appropriate case for summary assessment.  Specifically, Mr Joseph Ng, counsel for D1, submitted that:[3]

(1)  It is a normal practice of the court in interlocutory applications to make summary assessment of costs.

(2)  The Security for Costs Application was a simple and self‑contained matter and would not affect P’s cash flow given its payment into court.

(3)  If the Costs Order Nisi was not varied, D1 would suffer prejudice as she would have to wait until the end of the appeal proceedings to enjoy the benefit of the costs order in her favour, when she had yet to recover the costs below (over HK$4.9 million) as the taxation proceedings is still far from conclusion.

(4)  Issues of proportionality and reasonableness of the costs claimed by D1 would be considered by the court in a summary assessment of costs.

(5)  In D1’s Statement of Costs filed on 30 July 2025, a detailed breakdown was provided seeking a total of HK$152,300.  There was no complexity in the costs as claimed, the sum of which were not so substantial or complicated to warrant taxation.

(6)  Given that this court had dealt with the Security for Costs Application and the present application, this court would be in a better position to assess costs much more efficiently than a taxing master.

7.  The application is opposed by P, acting in person. In essence, he submitted that:[4]

(1)  There is no proper justification for varying the existing order.

(2)  The default route is taxation, and summary assessment is ordinarily considered when the interlocutory application is disposed of, not retrofitted later because D prefers immediacy.

(3)  The sum already paid into court is security for costs of the appeal, and should not be depleted before the appeal is determined absent clear authority and compelling justification of which D1 failed to show.

8.  We consider that it is appropriate to deal with the present application on paper without an oral hearing pursuant to Order 59, rule 14A of the RHC.

9.  In our view, having considered the relevant papers, we accept Mr Ng’s submissions that it is appropriate to have the costs of the Security for Costs Application summarily assessed as the matter was relatively not complicated and the costs involved is not of a substantial amount.  In this respect, it is pertinent to note that in the Security for Costs Application, both parties had provided their Statement of Costs for summary assessment respectively on 23 July 2025 and 30 July 2025.  This suggests that P at that time also accepted that the nature of this matter was suitable for, and was in a position to have, the costs of the Security for Costs Application to be assessed summarily.

10.  Further, as we have noted in the CA Decision[5], in considering security for costs, the costs of the appeal could in principle embrace the costs of the whole process, including any security for costs application: see Chong Chin & Anor v Guoan International Limited [2021] HKCA 1707 at [12]; and Hong Kong Civil Procedure 2026 (Vol 1) at [59/10/35A].  In this respect, it is further noted that in the draft bill lodged by D1 in support of the Security for Costs Application[6], it has also included the costs of the Security for Costs Application itself.[7]

11.  For the above reasons, we accept that it is appropriate to summarily assess the costs of the Security for Costs Application and to have it paid out from the Security.  We therefore allow the variation application and order the Costs Order Nisi to be varied to the extent that D1’s costs for the Security for Costs Application be assessed summarily.

12.  As to the amount of that costs, after considering the parties’ respective Statement of Costs for summary assessment respectively filed on 23 July 2025 and 30 July 2025, we consider that the total sum of HK$152,300 sought by D1 to be excessive.  In this respect, we note that this sum now sought by D1 is almost three times the amount estimated in the draft bill[8] lodged in support of the Security for Costs Application.  We also find the costs now stated to have been incurred by D’s solicitors for the preparation of application bundles and perusal and consideration of documents in relation to that application to be excessive and plainly on the high side.  In the circumstances, after applying a global reduction, we summarily assess D1’s costs of the Security for Costs Application at HK$70,000.  We further order that there be payment out of this assessed sum HK$70,000 to D1 from the Security.

13.  As D1 has succeeded in this variation application, we further order that the costs of the Variation Summons be to D1, to be assessed summarily[9]. In this respect, we direct that D1 do lodge a statement of costs for the present application within 7 days from this decision, and for P to lodge and serve his statement of objections (limited to 1 page) within 14 days thereafter.  Upon receiving the above, unless otherwise directed, this court will summarily assess the costs of the Variation Summons.

[1]  [2026] HKCA 482.

[2]  [2025] HKCFI 359.

[3]  See paragraph 6 of the Written Submissions of D1 dated 9 June 2026.

[4]  See the Written Submissions of P dated 16 June 2026.

[5]  See footnote 54 of the CA Decision.

[6]  See exhibit “CCH-10” to the Affirmation of Cheung Cheuk Hang filed on 5 June 2025 (“Cheung’s Affirmation”).

[7]  See [40] of the CA Decision.

[8]  See exhibit “CCH-10” to Cheung’s Affirmation.  The amount estimated for the Security for Costs Application in the draft bill (Items A5 & C1) is HK$58,400.

[9]  D1 has asked in the Variation Summons for its costs and to be assessed summarily.  P has not advanced any or any justifiable reasons to oppose this.