TO HU SING v. CHEUNG KWAI CHUEN AND OTHERS

HCA 1930/2015

[2021] HKCFI 1233

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 1930 OF 2015

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D E C I S I O N

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1.  On 30 October 2020, I gave judgment in favour of the 1^st and 2^nd defendants (“the defendants”) on their counterclaim for specific performance of the provisional agreements for the sale and purchase of the two properties in question, with costs of the action and counterclaim to the defendants to be taxed if not agreed: see [2020] HKCFI 2747. I directed the parties to submit an agreed minute of order on the basis that completion should take place as soon as practicable. The parties have not been able to agree in one particular aspect, and that is whether part of the balance of the purchase price should be “carved out” and put on one side on account of the defendants’ costs pending taxation in case the plaintiff fails to provide any other form of security for their costs.

2.  The plaintiff is an individual residing in the United Kingdom.  Searches made on behalf of the defendants have not revealed any assets belonging to him in Hong Kong or any companies connected with him other than the properties in question.  The defendants are concerned, justifiably in my view, that there would be added difficulties, expense and delay if they eventually have to enforce this court’s costs order after taxation in the United Kingdom.  They have incurred approximately $1.5 million in costs and expect to be entitled to recover, after taxation, approximately $1 million from the plaintiff.  They therefore seek an order that the plaintiff be required to pay into court a sum of $1 million as security for costs, failing which the defendants be at liberty to deduct the sum from the amount payable to the plaintiff upon completion.

3.  Ms Choy for the plaintiff submits that the court has no jurisdiction to make the orders sought because the court is functus officio after giving judgment (and after the judgment was sealed on 31 December 2020) and has no further jurisdiction over the matter.  She also submits that RHC Order 23 which governs security for costs has no application after judgment in the action, especially where there is no appeal. 

4.  With respect I do not think it is necessary to go through the many authorities cited to me by either side on the question of jurisdiction under Order 23 such as Penny v Penny [1996] 1 WLR 1204; Brown v Haig [1905] 2 Ch 379; Dar International FEF Co v Aon Ltd [2004] 1 WLR 1395; Excalibur Ventures LLC v Texas Keystone Inc & others [2013] EWHC 4278 (Comm); Republic of Djibouti et al v Abdourahman Boreh et al [2016] EWHC 1035 (Comm), because it seems to me the problem is capable of a much simpler solution.

5.  The plaintiff is a judgment debtor in relation to costs, albeit the quantum payable has to be ascertained by taxation.  He is a foreign individual, but he has assets in Hong Kong in the form of the properties which will soon be transformed into the balance of the purchase price in the sum of $3,492,000 together with interest at 4% p.a. from 1 April 2010 to the date of completion.  From the position taken on his behalf towards the application this morning, there clearly appears a real risk that the funds in question, once paid over to him, will be removed out of the jurisdiction, unless restrained by this court.  This seems to me therefore a classic situation where a post‑judgment Mareva injunction up to $1 million may and should be granted for the protection of the defendants for a finite duration pending taxation or agreement on the quantum of costs.  It would be inappropriate to grant a Mareva injunction with an indefinite duration and I think one year may be appropriate for present purposes, which can be extended or abridged if necessary.

6.  I shall ask counsel to come up with the form of order within this morning for my approval.