TANG ON KWAI AND OTHERS v. TANG HOI WO

CACV 181/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 181 OF 2008

(ON APPEAL FROM HCA NO. 1802 OF 2006)

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REASONS FOR DECISION

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1.  The plaintiffs are the managers of Tang Kwong Yu Tong (“the Tong”).  The defendant is a member of the Tong.  The dispute arose out of a lease entered into between the plaintiffs and the defendant on 1 June 2004.  Chu J in a 22-page judgment, entered summary judgment in favour of the plaintiffs and dismissed and struck out the defendant’s counterclaim.  The defendant has filed a Notice of Appeal.  This is the plaintiffs’ application for security for costs of the appeal, not on the ground that the plaintiffs might have difficulty or will incur expense in enforcing any cost order against the defendant, but that the appeal is bound to fail.

2.  Whether or not to grant security for costs of appeal is in the discretion of the court.  The court can order security if it is satisfied that the appeal is an abuse of the process of the court.  In such circumstances, normally the court applied the same test as in the case of an application to strike out a Notice of Appeal.  An appeal can be struck out if there is no possibility that the grounds of appeal are capable of argument.  The power to struck out should be confined to plain and obvious case.  Hong Kong Civil Procedure 2008 59/10/32 and 59/3/6.

3.  If the appeal is bound to fail, one would expect an application to strike out the Notice of Appeal.

4.  Mr Tang, appearing for the plaintiffs, informed me that a strategic decision was made not to apply to have the Notice of Appeal struck out because that would have required a hearing in court, and hence the instruction of counsel, whereas an application for security for costs would be heard in chambers and solicitors have the right of audience.

5.  But this is not a case where the plaintiffs do not have the means to employ counsel.  Nor is it said that the defendant might not be able to pay the costs of such an application should such costs be eventually awarded against him.  Nor is this a case where if security were ordered, the defendant would not be able or willing to comply.  Instead, there is every indication that this is the sort of case which would be pursued to the bitter end.

6.  I would not encourage an application for security for costs on such ground when there are no good reasons why an application to struck out was not made. 

7.  Nor are the facts so clear that the matter could have been resolved in half an hour.  At first glance, it does not appear to me that it is plain and obvious that the appeal is not arguable.  It may be that if I were to spend hours trying to master all the facts, I might be able to come to a view after a short hearing with the help of experienced counsel.  But that is not an efficient use of judicial time.  Even if I were to order security on the basis that the appeal is an abuse of process, that would not by itself have stopped the defendant from appealing.  As I have said this is a case where it is likely that the defendant can and will provide the security so there will still be a full hearing.  The plaintiffs would be no better off. 

8.  For these reasons, I have dismissed the application for security with costs assessed at $100.