王万宾 v. 香港城市大学

DCCJ 487/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 487 OF 2014

(Transferred from HCA 805/2011)

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DECISION

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Introduction

1. The defendant took out a summons for an order of security for costs against the plaintiff pursuant to Order 23 rule 1(1) of the Rules of District Court, Cap 336H (“the defendant’s summons”).  The defendant seeks the plaintiff to provide security for costs in sum of $1,440,249.80 being costs up to and including the setting down of the action for trial.

Undisputed facts

2. The plaintiff was enrolled as a full time student of the defendant university in a PhD program offered by the Department of Manufacturing Engineering and Engineering Management from 1 September 2004 to 31 August 2007 and thereafter extended as a part time student.

3. Being a full time PhD student, it is a term of the contract that the plaintiff should observe the regulations and guidelines set by the defendant as contained in the “Guidebook for Research Degree Studies 2007 – 2008”.  The relevant paragraphs are as follows:-

(1) Under RD 6.1 of Appendix 1, the maximum study period and/or candidature of a full time PhD student who already had a research master’s degree is 3 years.

(2) Under RD 11 of Appendix 1, a candidate’s failure to observe the University’s regulations and guidelines, and/or unsatisfactory academic performance may result in termination of a candidate’s study.

(3) Under §16.2 of the Guidebook, the internal and external examiners should normally be at the grade of Associate Professor or above, and have appropriate expertise related to the subject area of the student’s thesis.  Individual studying for a higher degree should not be appointed as examiners.

(4) Under §17.6 of the Guidebook, the thesis examination should include an oral examination ….  [It] is compulsory ….  Students who have not fulfilled the coursework or any other academic requirements stipulated by the University will not be allowed to undertake oral examination.

4. In or about February – March 2008, the plaintiff submitted his thesis (“1^st thesis”) for examination.  The defendant appointed 3 examiners to sit on the panel of examiners to assess the plaintiff’s thesis.  One of the examiners suggested the plaintiff should revise and resubmit his thesis for re-examination before the plaintiff could proceed with an oral examination originally scheduled in May 2008.

5. Since the plaintiff’s 3-year study period of the PhD program has lapsed, he was required to apply for an extension for his candidature.

6. Both the deadlines for resubmission of his thesis and to apply for extension for his candidature (by paying the continuation fees) fell on 31 October 2008.

7. The plaintiff failed to resubmit his thesis (“the 2^nd thesis”) on time. On 1 December 2008, the defendant wrote to the plaintiff and notified him his study was suspended. Nevertheless, the plaintiff was given an indulgence to resubmit his 2^nd thesis by 31 May 2009, failing which his studentship will be terminated.

8. On 4 June 2009, the plaintiffs resubmitted his 2^nd thesis to his PhD supervisor.  The 2^nd thesis still failed to meet the requisite academic standards.  The plaintiff was notified it should be further revised and resubmitted for re-examination before he could proceed to an oral examination.

9. Neither did the plaintiff resubmit his thesis nor apply for further extension of candidature before the last deadline imposed by the defendant on 30 April 2010.  

10. On 17 March 2010, the plaintiff sent an email to his PhD supervisor, Dr Peter Tse, he indicated he would not further resubmit his 2^nd thesis.

11. By a letter dated 15 June 2010, the defendant notified the plaintiff that his study and registration status was terminated with effect from 27 May 2010.

The proceedings

12. The plaintiff originally commenced the proceedings in the Court of First Instance (HCA 805 of 2011). The plaintiff’s claim consisted of 3 causes of actions: (i) breach of the Personal Data (Privacy) Ordinance, Cap 486; (ii) libel and (iii) breach of contract.  On 11 July 2013, the defendant took out a summons for an order to strike out the plaintiff’s claim. On 30 January 2014, Master S Lo of the Court of First Instance made an order to strike out the first two causes of actions; breach of contract was the only surviving claim. The High Court proceeding was then transferred to the District Court [1].

The plaintiff’s claim

13. The plaintiff’s surviving claim was breach of contract (the Guidebook), he alleges the defendant’s:-

(1) failure to provide qualified examiner(s) for assessing his thesis;

(2) failure to arrange an oral examination; and

(3) termination of his PhD study unreasonably.

The legal principles

14. Order 23 rule 1(1) of the Rules of District Court states:-

“Where, on the application of a defendant to an action or other proceeding in the Court, it appears to the Court- (a) that the plaintiff is ordinarily resident out of the jurisdiction…. then if, having regard to all the circumstances of the case, the Court thinks it just to do so, it may order the plaintiff to give such security for the defendant's costs of the action or other proceeding as it thinks just.”

15. Mr Dawes, counsel for the defendant submitted, the approach should be a two-stage test, consisting of the jurisdiction stage and the discretion stage[2].

16. At the jurisdiction stage, a security for costs order is applicable on ordinary resident abroad. The commentary of the Hong Kong Civil Procedure 2015, at §23/3/4 defines an ordinary resident abroad as:-

“A plaintiff who is ordinary resident abroad may be ordered to give security for costs.  The onus is on the defendant to prove that the plaintiff’s is “ordinary resident” out of the jurisdiction.  The question is one of fact and of degree; it does not depend upon the duration of the residence, but upon the way in which a man’s life is usually ordered, and it contrasts with occasional or temporary residence…”

17. At the discretion stage, it is trite that an order of security for costs would usually be granted if the plaintiff cannot clearly demonstrate that he has a high degree of probability of success at trial.

18. The impecuniousness of the plaintiff has to be considered in the discretionary stage as well. In Re Silver Dawn, unrep, CACV 171/1992 Godfrey JA held at page 9 of the judgment:-

“The principle applicable appears to me to be as follows: Where a plaintiff outside the jurisdiction of the court resists the making of an order for security for costs against him on the ground of his impecuniosity, he must be prepared to prove that the effect of an order against him would be to stifle his action, so that it would be a denial of justice for the court to make the order. It does not follow from the mere fact that a man has no capital of his own that he is unable to provide security for the costs of his action. He may have friends; he may have business associates; he may have relatives; all of whom can help him in his hour of need, as Brandon L.J. pointed out in the Court of Appeal in M V Yorke Motors v Edwards [1982]1 WLR 444 (see the speech of Lord Diplock at p 449).

So the court must, in every such case as this, decide whether, on the totality of the evidence, it ought to be inferred that it would really be impossible for the plaintiff to provide or procure the provision of the sum in which security would otherwise be ordered.  Looking at the totality of the evidence in this case, the plaintiff has satisfied me that it really would be impossible for him to provide or procure the provision of $500,000 as security.  That is really the end of the matter.”

19. With regard to whether the defendant has caused the plaintiff’s impecuniosity, in Tri-Tech Metals Co. Ltd v. YKK AP Hong Kong Ltd (unrep, HCCT 60/2004),  Burrell J observed a “casual link” has to be established between the two, and does not involve a consideration of merits.

“16. If “caused” means no more than a “causal link” I am satisfied that this particular issue can be safely resolved in the plaintiff’s favour. If on the other hand, “caused” always implies blame then this issue would hardly ever arise. In virtually every case the issue of security for costs would pre-date any determination of blame. Therefore the “circular argument” submission would succeed on virtually every occasion.

17. Where, as in this case, the plaintiff was effectively 100% dependant on the defendant and had invested a vast amount of time, work, money and labour into substantial projects the “causal link” argument (which involves no consideration of the merits) is preferable.”

The plaintiff’s submission

20. The plaintiff is a litigant in person. He opposed the defendant’s summons by saying:

(1) The defendant was in breach of an order dated 20 May 2013 (it should be an order made Master Ho of the Court of First Instance dated 25 April 2013, prior to the transfer of proceedings to the District Court). In paragraph 5 therein, it was ordered “all interlocutory applications including application to strike out as may be advised shall be taken out within 14 days thereafter”. The defendant is not entitled to take out the present application out of time.

(2) The plaintiff has a meritorious claim.  The defendant was in breach of contract because it has failed to provide qualified examiners to assess his thesis.  He also complained the unreasonable conduct of the defendant in terminating his PhD studentship.

(3) The plaintiff has no means to satisfy the security.  He put the blame on the defendant that he was being deprived of opportunities to attain a promising career for 3 years.  He is currently living on a scholarship of AUD2,000 (around HK$13,000) per month.

The issues

21. Mr Dawes has defined the issues succinctly:-

(1) whether the defendant is entitled to apply for security for costs at this stage of proceedings;

(2) whether the plaintiff can demonstrate he has a high degree of probability of success at trial; and

(3) whether the plaintiff can resist an order for security for costs on the ground of his impecuniosity.

Discussion

Ordinary resident out of the jurisdiction

22. It is almost not disputable that the plaintiff is an ordinary resident out of jurisdiction. He stated his residential address in Australia in the Writ of Summons; he pleaded in the last paragraph of the statement of claim that he is residing in Australia; and had confirmed with the defendant’s solicitors his new address in Australia in an email dated 2 October 2012.  

Whether the defendant is entitled to apply for security for costs at this stage of proceedings.

23. The answer is yes. The order dated 25 April 2013 is a case management order. In the preceding paragraphs of the same order, Master Ho so ordered the parties to exchange witness statements and counsel’s advice to be obtained.  Subsequently, the defendant took out a summons to strike out the plaintiff’s statement of claim on 11 July 2013 and was heard by Master S Lo on 29 January 2014. As there was no subsequent order to debar the defendant from taking out other applications, including but not limiting to security for costs, I am satisfied the defendant is entitled to take out the present application at this stage of the proceedings.

High degree of probability of success at trial

24. The plaintiff’s only claim is alleging the defendant was in breach of contract that no qualified examiners were provided in assessing his thesis which resulted in two rounds of resubmission.  He was also being deprived of having an oral examination. Although the qualifications of the examiners are issues to be determined at trial, solely on the undisputed facts, the plaintiff has been given ample opportunities to resubmit his thesis for re-examination. Deadlines are being postponed repeatedly.  It was only the plaintiff’s reply by way of an email dated 17 March 2010 that he elected not to further resubmit his thesis.  The plaintiff’s choice caused the defendant to terminate his studentship with effect from 27 May 2010.  The plaintiff might be facing an uphill battle in substantiating his claim.

The plaintiff’s impecuniosity

25. The plaintiff blamed the defendant has caused the delay in his academic path and that he was unable to secure a promising career. He is now living on a AUD 2,000 scholarship in Australia.  

26. I am not satisfied there was a “casual link” (as in Tri-Tech) between the conduct of the parties. As there was a 4-year lapse from the date of termination on 27 May 2010 until today.  It is implausible for the plaintiff to remain unemployed, bearing in mind the plaintiff is not an unskilled labour, he has obtained a master’s degree prior to the enrollment to the defendant’s PhD curriculum. The plaintiff’s explanation is not persuasive.

27. Mr Dawes further submitted, it was well stated in Re Silver Dawn, not only the plaintiff’s financial ability is to be examined, but also the plaintiff’s ability to raise fund to meet an order of security for costs. The burden is on the plaintiff to establish it is impossible for him to provide or procure the provision of such security.  Apart from repeating his financial difficulty, I am not aware the plaintiff has explained this aspect in his affirmation which he is required to demonstrate.

28. The plaintiff’s arguments are bound to fail.

Conclusion

29. I shall exercise my discretion to order security for costs against the plaintiff with costs to the defendant.  I make the following orders:-

(1) Leave be granted to the defendant to issue application for security for costs on the date of summons.

(2) Unless the plaintiff provides security in the sum of $1,440,249.80 to cover costs up to and including the setting down of the action for trial within 28 days from the date of this decision, the action shall be stayed. 

(3) All security shall be provided in the form of payment into court to be put into an interest bearing account.

(4) The costs of the defendant’s summons be payable by the plaintiff to the defendant, with certificate of counsel, to be taxed if not agreed.