RE LAU KAM SING DICKIE

CACV 330/2019

[2022] HKCA 980

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 330 OF 2019

(ON APPEAL FROM HCB NO 2311 OF 2019)

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J U D G M E N T

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Hon Kwan Ag CJHC (giving the Judgment of the Court):

1.  On 13 August 2021, we handed down our judgment[1] (“the CA Judgment”) refusing to grant leave to the debtor to adduce further evidence in his appeal against the bankruptcy order made against him by Au-Yeung J on 24 June 2019[2], with costs to the petitioner summarily assessed at $122,780.

2.  There are three applications before the court:

(1)  the debtor’s notice of motion filed on 9 September 2021 for leave to appeal to the Court of Final Appeal from the CA Judgment;

(2)  the petitioner’s application filed on 12 November 2021 for leave to withdraw $122,780 from the security for costs paid into court by the debtor[3]; and

(3)  the petitioner’s application filed on 12 November 2021 for further security for costs of the appeal.

3.  The debtor filed a notice to act in person on 6 September 2021. On 16 December 2021, The Registrar of Civil Appeals directed all these applications are to be dealt with together.

4.  The factual and procedural backgrounds have been set out in detail in two judgments of the Court of Appeal[4] and would not be repeated.

Leave to appeal to the Court of Final Appeal

5.  Section 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance, Cap 484 provides that leave to appeal to the Court of Final Appeal may be granted if the question involved in the appeal is one which, by reason of its great general or public importance, or otherwise, ought to be submitted to the Court of Final Appeal for decision.

6.  It is well established that leave will generally be refused in respect of interlocutory appeals that unless it can clearly be seen that: (1) the proposed appeal genuinely raises a question of law of great general or public importance; (2) the result of the appeal would indeed turn on how that question is answered; and (3) such result is likely to make a significant contribution to the just disposal of the litigation. (CSAV (Hong Kong) Group v Jamshed Safdar (2007) 10 HKCFAR 629 at §1)

7.  The debtor’s notice of motion did not expressly mention any question that could be said to be of great general or public importance that may be involved in the intended appeal against the CA Judgment. It set out four grounds of the application in the nature of grounds of appeal which are as follows:

(1)  the Court of Appeal erred in law in refusing to grant leave to adduce new evidence in the appeal when it was not a last minute application and no hearing date has yet been fixed for the appeal;

(2)  the Court of Appeal erred in holding that there is no valid reason for the delay of 14 months in that the debtor was not legally represented for nearly 8.5 months and he is not familiar with the law and court procedure;

(3)  the Court of Appeal erred in holding that the debtor failed to meet the first condition laid down in Ladd v Marshall [1954] 1 WLR 1489 (if the new evidence could have been obtained at the trial with reasonable diligence) when there is no statutory requirement for him to file any evidence prior to the bankruptcy hearing before the judge which lasted for not more than 15 minutes; and

(4)  the Court of Appeal was wrong in principle in refusing to exercise its discretion in favour of the debtor to adduce new evidence.

8.  The debtor asserted in his reply submission that the above grounds clearly meet the criteria of section 22(1)(b), in that the grounds, by reason of their great general or public importance, or otherwise, ought to be submitted to the Court of Final Appeal for determination. He claimed that the refusal to permit him to adduce new evidence on appeal is disproportionate to his right to a just and fair disposal of the appeal when his asset and/or estate is at stake.

9.  In respect of the grounds raised above, the debtor repeated the submissions of his former counsel Mr Bernard Man, SC dated 2 November 2020, which we have addressed fully in the CA Judgment. He also sought to give additional explanation why he was not in possession, custody or power of the relevant documents in §15.6 of his submission. Such new explanation cannot be made by way of submission in place of an affirmation. In any event, the new explanation does not assist him. The fact that his office premises were re-possessed by his landlord on 25 July 2019 and he was out of Hong Kong at the time and was refused access to the premises until the arrears of rent were paid cannot explain, satisfactorily or at all, why he could not have adduced the relevant evidence prior to the hearing of the petition on 24 June 2019 or soon after he filed the notice of appeal on 19 July 2019.

10.  The CA Judgment refused leave to adduce further evidence on appeal on the ground of unjustifiable and excessive delay as well as the debtor’s failure to satisfy the Ladd v Marshall condition of reasonable diligence. The grounds of appeal as formulated are fact sensitive and clearly do not raise any question of law of great general or public importance. The debtor’s contention that the CA Judgment is disproportionate to his right to a just and fair disposal of the appeal is premised on the particular circumstances of his case. The criteria in section 22(1)(b) are plainly not met.

11.  As stated in CSAV (Hong Kong) Group at §1, interlocutory appeals to the Court of Final Appeal are “rare and exceptional”. We do not think the present case is rare and exceptional for leave to appeal to be granted. The intended appeal does not genuinely raise any question of law of great general or public importance.

12.  The debtor would appear to rely also on the ‘or otherwise’ limb but has not developed his argument why leave to appeal should be granted on this basis even if he fails on the question of great general or public importance limb. Leave is not granted on the ‘or otherwise’ limb save in an exceptional case. We do not think the circumstances here are exceptional. In any event, the practice is for the Court of Appeal to defer to the views of the Appeal Committee of the Court of Final Appeal if leave should be granted on the ‘or otherwise’ limb.

13.  For the above reasons, we decline to exercise our discretion to grant leave to appeal against the CA Judgment and dismiss the debtor’s notice of motion filed on 9 September 2021.

14.  There is no reason why costs of this application should not follow the event. We order the debtor to pay the petitioner’s costs of this application.

15.  The petitioner has filed a statement of costs for summary assessment in the total sum of $41,416.33. The debtor has made detailed response to this statement. There is no objection to counsel’s fees. The objections raised are to the charges of the solicitors for the hourly rate, duplication of work, excessive time, and unnecessary work. Having considered his objections, we assess reasonable costs allowed to the petitioner in the amount of $39,000.

The petitioner’s application for payment out

16.  The petitioner seeks an order for payment out of $122,780 (for the petitioner’s costs summarily assessed in the CA Judgment) from the amount of security paid into court by the debtor.

17.  The debtor did not make any submissions in opposition to this application. Nor has he sought to vary the costs order nisi and summary assessment, which have become absolute after 14 days of the CA Judgment.

18.  We give leave to the petitioner to withdraw $122,780 from the security for costs paid into court by the debtor for the payment of the costs ordered against him in the CA Judgment.

The petitioner’s application for further security for costs

19.  As mentioned, the Court of Appeal has decided on 8 June 2020 this is an appropriate case to make an order against the debtor for security for costs of the appeal because of his impecuniosity, his failure to provide sufficient countervailing factors and the lack of merits in the appeal[5]. He was ordered to provide security of $200,000, which he paid into court on 6 July 2020.

20.  An order for security for costs may be ordered against a bankrupt in respect of an appeal against the bankruptcy order[6]. It may also cover the costs of applications in the Court of Appeal incidental to the appeal[7].

21.  The court retains a residual discretion to make a further order for security where there has been a material change of circumstances that justifies it. The further security that might be ordered should be limited to costs referable to the changed circumstances and the application for further security is not to reopen arguments about security for costs already ordered[8].

22.  After the debtor was ordered on 8 June 2020 to provide security for costs, he issued an application for leave to adduce further evidence on appeal, which resulted in the CA Judgment on 13 August 2021 with costs ordered against him assessed at $122,780. Further, he issued an application on 9 September 2021 for leave to appeal to the Court of Final Appeal against the CA Judgment, which we have decided against him and ordered him to pay costs assessed summarily at $39,000. We are satisfied that these are material change of circumstances since the debtor was ordered to provide security that justifies further security to be furnished.

23.  The debtor submitted that the application for further security is “an unreasonable oppressive attempt to suffocate the appeal, burdening [him] with heavy financial pressure” and could be viewed as “a tactic to interfere in [his] seeking leave to adduce new evidence in his appeal”. He claimed that his impecuniosity is attributable to the bankruptcy order wrongly made against him and he has strong merits in the appeal. He submitted that he should not be ordered to provide further security because he is unable to pay from his own resources.

24.  The CA Judgment has decided against the debtor on his application to adduce further evidence in this appeal. We have refused leave to appeal against the CA Judgment. The debtor should not be allowed to reopen arguments on the merits of the appeal and the alleged oppression in seeking security against him.

25.  We think this is an appropriate case to order further security.

26.  The petitioner seeks further security of $200,000 by payment into court within 28 days. He has exhibited an updated draft skeleton bill for $322,057.

27.  The debtor asks the court to assess a reasonable amount and grant him 56 days to raise funds elsewhere for payment.

28.  The further security should be limited to costs referable to the changed circumstances. They are the costs awarded to the petitioner in the two subsequent applications taken out by the debtor. We order further security of $160,000 to be provided by the debtor by payment into court within 42 days from the date of this judgment. This appeal shall be stayed until payment of the further security and notice of payment is given by the debtor to the Registrar of Civil Appeals and the petitioner’s solicitors. In default of payment of the further security as specified, the petitioner’s solicitors shall notify the Registrar whereupon this appeal shall be dismissed without further order.

29.  Costs of this application should follow the event. We order the debtor to pay the petitioner’s costs of the application for further security. The petitioner has not lodged a statement of costs for summary assessment despite the directions of the Registrar dated 16 November 2021. We order the costs of this application to be taxed if not agreed.