YANG JUNLING v. LEE YIU KEI AND ANOTHER

HCA 1723/2016

[2020] HKCFI 2398

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 1723 OF 2016

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D E C I S I O N

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1.  The trial of this action is due to commence on 21 September 2020.

2.  On 2 September 2020, the 2^nd Pretrial Review was held.

3.  On 26 August 2020, the defendants (“Ds”) took out a summons (“1^st Summons”) for:

(a)  leave to file what is in effect their joint supplemental witness statement dated 21 August 2020 attached to the 1^st Summons;

(b)  leave to file at some unspecified future time their 2^nd supplemental witness statements (but with no draft attached and no indication as to what the intended contents are going to be); and

(c)  security for costs in the sum of HK$2 million (the “Application for Security for Costs”).

4.  On 28 August 2020, Ds took out another summons (“2^nd Summons”) to amend the part of the 1^st Summons relating to the Application for Security for Costs (to specify that if P is to fail to give the security, the claim will be dismissed).

5.  During the 2^nd Pretrial Review, except the Application for Security for Costs, I dealt with the 1^st and 2^nd Summonses. The reason why the Application for Security for Costs was not dealt with was this.  In the course of the 2^nd Pretrial Review, Ds sought to rely on their joint affirmation (the “Joint Aff”) filed only at 2 pm on 2 September 2020 (the day of the 2^nd Pretrial Review). So as to allow Mr Kwong, counsel for the plaintiff (“P”), opportunity to properly consider the matter, I allowed Ds to file the affirmation late, but granted Mr Kwong leave to file his written submissions by 4 September 2020.  I also allowed Ds to file their written reply by 8 September 2020.  I indicated that I would deal with the application on the papers.

6.  I have since received Mr Kwong’s written submissions.  None has been received from Ds by the deadline I ordered and directed.

7.  In the Joint Aff, Ds asserted:

“ We make this to support of summons of 26/8 & 28/8 of 2020, item 3 on security of costs. Reasons & Grounds : Plaintiff (P) has no assets & income in Hong Kong & do not live in HK but in PRC, as said by agent Yan Hoi in his email of 13/14 of May 2016 or 13/14/6 of June 2016 & on phone.”

8.  Order 23, rule 1(a) of the Rules of the High Court stipulates that:

“ (1) Where, on the application of a defendant to an action or other proceeding in the Court of First Instance, it appears to the Court —

(a) that the plaintiff is ordinarily resident out of the jurisdiction, or

…

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.”

9.  As explained at §23/3/4 of the Hong Kong Civil Procedure 2020 Vol 1:

“ A plaintiff who is ordinarily resident abroad may be ordered to give security for costs. The onus is on the defendant to prove that the plaintiff is ‘ordinarily 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 …

…

The issue of residence is a fact finding exercise so the quality of evidence will be important, especially for interlocutory proceedings where deponents cannot be cross-examined.  As such, the court will strictly adhere to the rules concerning the admissibility and weight of evidence on affidavit.  In Xu Xiuzhi v Wong Yuk Choi (above)[1], the court refused to attach any weight to the defendant’s evidence relied on and provided in his affidavit as it was hearsay.  Much of the evidence was based on what the defendant was told by his relatives, business counterparts and the security guards at the residential and commercial premises of the plaintiff.”

10.  The evidence which Ds have placed before me, which is at best hearsay, falls far short of showing that P is ordinarily resident out of Hong Kong.

11.  At about 4:30pm on 10 September 2020, Ds belatedly filed her submissions. They also attempted to file an additional affirmation in support of their 2 Summonses.  No extension of time for her to do so has been sought.  Ds may be acting in person.  But that gives them no entitlement to ignore the Rules of the High Court and Court Orders.  Further, as I will explain below, Ds have previously made and withdrew an application for security for costs against P.  They have had ample time to pursue the matter had they wanted to.  Allowing Ds to file yet another affirmation (and another affirmation late and without leave) is entirely contrary to the underlying objective of ensuring cases to be dealt with as expeditiously as is reasonably practicable. I refuse to grant them leave to do so. 

12.  Also important is this.  Even if a plaintiff is ordinarily resident out of Hong Kong, it remains a matter for the court to decide in its discretion whether security should be ordered.  As explained at §23/3/3 of the Hong Kong Civil Procedure 2020 Vol 1:

“ Rule 1(1) provides that the court may order security for costs ‘if, having regard to all the circumstances of the case, the court thinks it just to do so’. These words have the effect of conferring upon the court a real discretion, and indeed the court is bound, by virtue thereof, to consider the circumstances of each case, and in the light thereof to determine whether and to what extent or for what amount a plaintiff (or the defendant as the case may be) may be ordered to provide security for costs. It is not an inflexible or rigid rule that a plaintiff resident abroad should provide security for costs. …”

13.  In the present case, the following matters are relevant to my exercise of discretion:

(a)  On 4 January 2018, Master Ho ordered that all interlocutory applications should be taken out within 14 days thereof.

(b)  On 7 August 2018, when giving P leave to set the present case  down for trial[2], Registrar Lung made the following observations:

“ 7. In order to facilitate expeditious disposal of Ds’ applications, I offered my early dates for the parties. In the end, the parties agreed to fix this date for the hearing. On 1 August 2018, Ds wrote to me saying that they would take out other applications of security for costs and interrogatories later. She proposed to adjourn this hearing to another date so that all applications could be heard together. P opposed this proposal. I refused the proposal as there was no reason for Ds not to take out all interlocutory applications in one go. It smacks of delaying tactics on the part of Ds.

…

30. Although Ds are having two applications, one on security for costs, the other on interrogatories, it appears that such applications are to delay the proceedings. Master Ho had on 4 January 2018 made an order that all interlocutory applications shall be taken out within 14 days after 31 May 2018. Ds are out of time. I shall therefore give leave to the plaintiff to set the matter down for trial …” (emphasis added)

(c)  As pointed out by Mr Kwong in his submissions, what Ds told Registrar Lung was incorrect.  They had by 1 August 2018 in fact already taken out a summons (of 27 July 2018, the “27/7/18 Summons”) against P for, amongst other things, security of costs in the sum of HK$1.2 million;

(d)  I have personally reviewed the court files:

(i)  The 27/7/18 Summons is in fact amongst the court files;

(ii)  That summons was set down to be heard on 18 September 2018;

(iii)  On 9 August 2018, Ds wrote in and requested leave to withdraw the 27/7/18 Summons.  In that letter, Ds also said that that summons had not been served upon the other party;

(iv)  By letter of 16 August 2018 in reply from Clerk to Master Lui to Ds, Ds were informed that leave to withdraw was granted, and the hearing of 18 September 2018 vacated.

14.  In making the present Application for Security for Costs, Ds chose not to inform this court of the above background.  No evidence has been filed explaining the reasons for the withdrawal of the 27/7/18 Summons, or why Ds decided to renew the application only now shortly before the trial.  There is further no valid reason for the substantial delay in making the present application.

15.  As explained in §23/3/31 of Hong Kong Civil Procedure 2020 Vol 1, delay is a relevant consideration to the exercise of the court’s discretion, and may be treated as an important one.

16.  Further, as Mr Kwong has submitted, Ds have been acting in person. No materials have been placed before me justifying the requested amount of security (HK$2 million).

17.  Having considered all relevant circumstances, I dismiss Ds’ Application for Security for Costs.  I say that on the facts of this case, I would in any event have dismissed Ds’ Application for Security for Costs on the matters set out in paragraphs 13 to 16 above.

18.  Bearing in mind that the trial will commence soon, and rather than to waste time and resources at this stage to deal with issues of costs, I order that costs of the Application for Security for Costs be reserved so that the matter may be dealt with at or upon conclusion of the trial.  For avoidance of doubt, I say that the reservation of costs is no indication that Ds may not ultimately be ordered to bear the costs of the present application.