RE DR ALICE LI MIU LING

CACV 168/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 168 OF 2012

(ON APPEAL FROM HCB NO. 6537 OF 2011)

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DECISION

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Hon Yuen JA:

1.  This is an application by the respondent in CACV 168/2012 for security for costs of the appeal, which is from a Bankruptcy Order.

Bankruptcy Order

2.  On 4 July 2012, Barma J made a Bankruptcy Order against Dr Alice Li Miu Ling ("the Debtor") on a petition presented by Dr Thomas Wong Kwok Shing ("the Petitioner"). 

3.  The petition was based on a statutory demand for summarily assessed costs orders, together with interest.   

4.  The hearing of the petition had been adjourned on a number of occasions.  However the Debtor was still unable to show that she was able to pay the debt, and the Bankruptcy Order was eventually made in July 2012, some 9 months after the Petition was presented.

5.  There was no stay of the Bankruptcy Order. 

Notice of Appeal

6.  On 27 July 2012, the Debtor served a Notice of Appeal.  The ground of appeal stated in the Notice of Appeal was as follows:

“The debtor can pay off the debt. Evidence in support will be available for the court hearing”.

No evidence has been submitted to this court other than an affirmation that had already been before Barma J.

Application for security for costs 

7.  On 17 September 2012 the Petitioner issued a summons for security for costs of the appeal.  This was supported by the affidavit of Fok Wing Kuen, the Petitioner’s solicitor.  

8.  The Petitioner’s application is made on the ground of the Debtor’s impecuniosity, which is generally recognized as a “special circumstance” under Order 59 rule 10(5) of the Rules of the High Court.

9.  The Debtor has not filed an affirmation in opposition to the summons but has filed a written submission in opposition which I have considered.

Principles

10.  Security for costs can be ordered in an appeal from a Bankruptcy Order (see Ho Ho Wah v The Incorporated Owners of Hoi Fu Court CACV158/2008, 20.1.2009).

11.  The relevant principles governing applications for security for costs of an appeal have been summarized by the Court of Appeal in Chung Kau v Hong Kong Housing Authority and others CACV 122 of 2003.  The principles are well-known and are as follows.

“The relevant principles in particular the treatment of impecuniosity as a special circumstance are summarized in Hong Kong Civil Procedure 2004 vol. 1 at paragraphs 59/10/28 - 59/10/29. In this context however, I would emphasize the following:

(1) The fact that an appellant is impecunious does not lead automatically to an order that security for costs must be provided. The court is entitled to consider other relevant factors such as the strength of the appeal to determine whether or not it would be just to order that security be provided.

(2) That said, as a matter of practice, once an applicant for security can demonstrate that impecuniosity (or some other factor such as difficulty or expense in enforcing a costs order) exists, whilst the court retains an overall discretion whether or not to make the order, it would then generally be up to the party resisting the application for security to demonstrate countervailing factors which would militate against such an order being made. A common countervailing factor to resist applications for security are the merits of an appeal.

(3) On a consideration of the merits of the appeal, while a detailed examination is not required (or desirable, even if possible on the materials before the court at this stage), the Court should form some sort of preliminary, even instinctive, view. Where the merits appear strongly one way or the other, this may by itself be a decisive factor. Thus, an appeal which is very strong would often be a very good reason not to order security. The converse of course also applies. A hopeless appeal may even by itself justify an order for security. However, if the court takes the view that the appeal could really go either way, then generally it will look to the existence of any other factors to tilt the balance, in the absence of which, security will be ordered. This is of course on the assumption that a factor such as impecuniosity has already been demonstrated”.

Impecuniosity

12.  It is clear in this case that the appellant is impecunious.  Despite many opportunities given to her by the court, she has not been able to pay the debt. 

13.  Her only ground of appeal is that she is able to pay the debt, but nothing has been produced in court to support that allegation.  At the hearing scheduled for this morning, I understood the appellant to say that judgment in her favour had been given by D.J. H.C. Wong in DCEO1/2004 with only reasons to be handed down.  However, further enquiries by the court have revealed that judgment was reserved.  The appellant then asked me to adjourn the hearing of this application until after judgment in that case is handed down.  I see no grounds to adjourn this application.        

No discretionary grounds

14.  In other words, there are no grounds which would enable me to exercise my discretion against making an order for security.

Estimate of costs

15.  As for the estimate of costs, I have considered the Petitioner’s skeleton bill.  The appeal (if it proceeds) should be a simple one given the present ground of appeal.  I would be prepared to order a sum of $100,000 as security for costs.

Order

16.  I would therefore order that the Debtor do within 8 weeks pay $100,000 into Court as security for the costs of and occasioned by his appeal, and that until such security is given, the appeal be stayed, and that in default of the security being furnished within the time aforesaid, the appeal stand dismissed without further notice or order, with costs of the appeal to be taxed if not agreed and paid by the Debtor to the Petitioner.

(After submissions on costs)

17.  I would also order that the Debtor pay the costs of the summons for security for costs.