LIM YI SHENN v. WONG YUEN YEE AND OTHERS

HCA 1323/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1323 OF 2010

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D E C I S I O N

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APPEAL

1.  The present appeal is an appeal by the 1^st, 2^nd and 3^rd defendants (collectively as "the Defendants") against the decision of Master Woolley given on 12 April 2011 ("the Master's Decision") by which the Master refused the Defendants' application for security for costs of this action.  The application for security for costs was originally made by summons dated 20 December 2010 under O 23 r 1 of the Rules of High Court. 

2.  At the hearing before the Master, the Plaintiff sought leave to adduce evidence of 2 further affirmations made by the Plaintiff, being the 2^nd Affirmation and 3^rd Affirmation of the Plaintiff filed respectively on 22 March 2011 and 8 April 2011 ("the said Affirmations"), as evidence in support of his opposition to the Defendants' application.  Leave was refused by the Master.  Accordingly, although the Master eventually refused the Defendants' application for security for costs , he excluded from the costs that he ordered against the Defendants the costs of the application, filing and serving of the said Affirmations of the Plaintiff.

3.  Since the Notice of Appeal was filed by the Defendants on 20 April 2011, the Plaintiff has not lodged any cross-appeal against the Master's refusal to grant leave to file the said Affirmations.  Nor has the Plaintiff taken out any summons to apply for leave to adduce the said Affirmations on appeal.  Despite this, at the hearing of the appeal, Mr Suen, Counsel for the Plaintiff, sought leave to refer to the said Affirmations as evidence in this appeal.  Mr Chan, acting for the Defendants, opposed the application. After hearing Counsel, I refused the Plaintiff's application for leave.

4.  In my view, it is wholly wrong for the Plaintiff to seek to renew his application for leave to adduce the said Affirmations, which he had made before the Master and had failed, without filing a cross ‑ appeal.   It does not matter that an appeal against a Master's decision is a rehearing and that the Court has power, in a proper case, to admit new evidence under O 58 r 1(5). The Master has already determined the application, and unless that decision is taken on appeal (in the present case, by way of a cross - appeal), this Court has no jurisdiction to vary the Master's decision or to reconsider the application that has already been disposed of: see, Jindal Exports Ltd v Waco Trading Co Ltd [2000] 2 HKC 46 at 47I to 48C (per Deputy Judge Chu, as she then was). 

5.  As no cross-appeal has been made, the Defendants were entitled to assume, and to proceed on the basis that the Plaintiff accepted the Master's ruling and would not refer to the said Affirmations in this appeal.

6.  The evidence contained in the said Affirmations primarily consists of the transcripts of certain recordings of a meeting and various telephone conversations that allegedly took place in April and May 2009.  The recordings were accordingly available back in 2009 and there is no reason why, if the Plaintiff had considered the same to be relevant to his case against the Plaintiff's application for security for costs, he would have failed to put in the evidence timely at the first opportunity.  He could have included the evidence in his 1^st Affirmation filed in opposition to the Plaintiff's application, but did not.  It is obviously too late for Mr Suen now to seek leave to file the said Affirmations, when the Plaintiff has given no explanation at all for the delay.  Not only has the Plaintiff not filed any cross-appeal, he has not given any notice to the Defendants of his intention to rely on the said Affirmations in the appeal (and by implication his non - acceptance of the ruling of the Master in this regard).  It was only after Mr Suen had filed his skeleton submissions (in which he made reference to the said Affirmations ) that it became clear to the Defendants that the Plaintiff intended to rely on the evidence excluded by the Master in this appeal.

7.  In these circumstances I refuse to allow Mr Suen to refer to the said Affirmations at the hearing.  

8.  The evidence filed by the parties in the present proceedings is relatively simple.  Indeed the Plaintiff's evidence consists largely of his own comments as to what he considers are the merits of the case as disclosed by the pleadings.  I do not, with respect, consider such evidence helpful.  I can read the pleadings myself and the Plaintiff's own construction and interpretation of the pleadings, and the conclusion he purportedly draws from it, has not helped me in any degree. 

9.   Some of the legal arguments raised by Counsel in this relatively simple case, however, merits careful attention.  In particular, Mr Suen has raised some interesting arguments - described in his skeleton submission as the "human rights arguments" - which I think are of some importance in this area of the law.  As it is, a total of 7 skeletons (3 by the Plaintiff and 4 by the Defendants) have been submitted by Counsel.  I am grateful for Counsel's submissions, and in deference to them, would like to take the opportunity to deal with the "human rights arguments" in a bit more detail in this Decision.

THE COURT'S POWER TO ORDER SECURITY

9.  O 23 r 1(1) of the Rules of High Court confers power on the Court to order security for costs.  Insofar as that rule is relevant to the present case, it provides as follows:

  "(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

(b)   ...

(c)   ...

(d)  ....

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 cost of the action or other proceeding as it thinks just."

10.  In the present case it is not disputed that the Plaintiff is not ordinarily resident in Hong Kong - he ordinarily resides in Singapore.  Although the Plaintiff had, at the time when he issued the Writ in this action, used a Hong Kong address, he was all along known to the Defendants as an ordinary resident of Singapore; and when the matter was raised by the Defendants' solicitors (by a letter dated 29 October 2010) with the Plaintiff's solicitors, the fact that the Plaintiff was resident outside the jurisdiction was readily admitted.  The present application for security for costs is based solely on paragraph (a) of O 23 r 1(1), and not the other paragraphs of the rule.  

11.  It is plain from the wordings of O 23 r 1(1) that as far as the power to order security is based on paragraph (a), the jurisdiction can only be exercised where it is shown or proved that the plaintiff is ordinarily resident out of the jurisdiction.  It is well-settled that a plaintiff who is ordinarily resident in Hong Kong cannot be ordered to provide security for costs, no matter how impecunious he is, and no matter how likely is the risk of the defendant not being able to recover costs from him if he fails in his action.

12.  Hence, for jurisdiction founded upon paragraph (a) of the rule, the ordinary residence of the plaintiff is of fundamental importance.  Two plaintiffs, one ordinarily resident in Hong Kong and the other outside, may be treated differently, even though the circumstances surrounding each of them are otherwise equal or similar.  Mr Suen submits that, accordingly, paragraph (a) of the rule is potentially  "discriminatory" (in the sense of being contrary to the Hong Kong Bill of Rights Ordinance ("HKBRO"), Cap 383) in its operation, and while he does not contend that paragraph (a) of O 23 r 1(1) should be struck down on that ground, he does contend that the Court is constrained to exercise the discretion conferred thereunder in a way which is not discriminatory.  In particular, in exercising the discretion, this Court is not entitled to take into account of the impecuniosity of the foreign plaintiff, and that "potential difficulties or burdens of enforcement outside Hong Kong are the rationale for the exercise of any discretion".  If Mr Suen is right, this would be a serious limitation to the discretion of the Court under the relevant rule, and although the same might not be of much importance on the particular facts of the present case, it can be a matter of great importance in other cases where the foreign plaintiff is shown to be impecunious.  When I consider the "human rights arguments" advanced by Mr Suen later in this Decision, I would need to consider this matter more carefully.

13.  Before I turn to those arguments in detail, it is convenient  for me, at this point, to dispose of another argument made by Mr Suen.  It is that the merits of this case are so overwhelmingly in favour of the Plaintiff that it would in any event be unjust to order him to provide security for costs.  As I do not think much of this argument, it is not out of any disrespect to Counsel that I propose to dispose of it rather briefly.

14.  As has been repeatedly pointed out by the Court, "it is not the function of the Court, when faced with an application for security for costs, to make a preliminary run at deciding the ultimate success or failure of the claim" (per Rogers VP in Sunchase International Group (China) Ltd & others v Vincor Group of Companies (Investment) Ltd & others [2004] 1 HKLRD 731 at 733D - E).  An application for security for costs is not an occasion for satellite litigation.  Unless it can be readily demonstrated that the case of a party has a high degree of success, it is generally not right for the Court to judge the merits of the case on paper.  Judging the merits of a case merely on paper can be dangerous, for what may appear strong on paper may turn out to be unconvincing upon fuller investigation; and what at first sight may raise eyebrows might turn out to be perfectly understandable after the witnesses have been seen and heard.  If I may gratefully adopt Megarry J's sagacious reminder in John v Rees [1970] Ch 345 at 402:

 "As everybody who has anything to do with the law well knows, the path of the law is strewn with examples of open and shut cases which, somehow, were not; of unanswerable charges which, in the event, were completely answered; of inexplicable conduct which was fully explained; of fixed and unalterable determinations that, by discussion, suffered a change."

15.  The Court should therefore exercise great care, particularly in cases where the facts are likely to be sensitive to oral evidence, in forming any view on the merits of a case based simply on paper.  In some simple cases where it is clear that the material facts can be readily ascertained from documents, this may sometimes be possible.  In a case such as the present, however, where there is a "very substantial amount of material that would have to be investigated in order to resolve the conflicting cases....  it [is] simply unrealistic to expect the court to be in a position to form any view as to the underlying merits of the dispute" (per Barma J in Bart Willem Jozef Bost v Jerry Teng Mei Sheung and another, HCCW 141/2007, unreported, 20 June 2011 (paragraph 32)).

16.  The approach of the Court is well - summarized by Kwan J (as she then was) in PT Graha Multimulia v Silver Tech Enterprise Limited, HCCW 883/2004, unreported, 1 March 2005, as follows (at paragraph 6):

 "It must be borne in mind that the threshold of demonstrating the probability of success in this situation is very high indeed.  As was mentioned by the court in a number of instances, the practice of going into the merits of the case in an application of this kind is to be deplored, unless it can be clearly demonstrated one way or other there is high probability of success or failure (Porzelack KG v Porzelack (UK) Limited [1987] 1 WLR 420 at 423B to F; Leslie Fay Companies, Incorporation trading as Breckenridge Sportswear Division v Cheerio Limited [1990] 1 HKC 463; Re Kwong Hing International (Holdings) Limited, HCCW No.409 of 1999, 6 October 1999, Sakhrani J.)"

17.  In the present case, the Plaintiff claims against the Defendants for breach of an agreement, referred to as the "Investment Agreement" in the Amended Statement of Claim, whereby the Plaintiff allegedly agreed to purchase shares of the 3^rd Defendant by investing HK$20 million, with a "moratorium" under which the Plaintiff allegedly agreed not to sell 50% of the shares purchased for at least 6 months.  The "Investment Agreement" was allegedly made orally on or about 10 April 2008, and the Defendants expressly deny its existence.  The Plaintiff alleged that it was pursuant to the Investment Agreement that he subsequently entered into a placement agreement to subscribe for 54 million shares in the 3^rd Defendant at HK$0.37 each (for a total consideration of HK$19,980,000) .  It is the Defendants' case that in entering into the placement agreement and purchasing shares of the 3^rd Defendant, the Plaintiff was simply relying on his own judgment and not pursuant to any agreement with the Defendants at all.  In my view,  whether there was in fact such an "Investment Agreement" orally made, and if so, on what terms, is an issue that can only be determined after hearing oral evidence from the relevant witnesses. 

18.  In addition to alleging breach of the "Investment Agreement", the Plaintiff alleged that he had entered into the same in reliance upon certain misrepresentations of the Defendants.  It is not necessary for me to go into the details, but essentially the Plaintiff relies on the following alleged misrepresentations.  Firstly, the Plaintiff alleges that the Defendants had represented to him that the shares that he agreed to purchase would be new shares issued by the 3^rd Defendant.  This was later found out to be false in that the 54 million shares that were sold to him were in facts shares originally owned by the 1^st Defendant. Secondly, it is alleged by the Plaintiff that the Defendants had represented to him that there were various other independent investors committed to investing in the 3^rd Defendant by way of issue of shares, but it turned out that the investors were not independent at all and eventually their investments did not materialize.  Thirdly, the Plaintiff alleges that the Defendants had represented to him that out of the moneys agreed to be invested by the Plaintiff, HK$10 million would be held on trust (presumably by the 3^rd Defendant) for the specific purpose of investing in a company called Luson Biotechnology Development Limited ("LBD").  It is alleged, however, that the 3^rd Defendant had failed - and the 1^st and 2^nd Defendants had failed to procure it - to invest HK$10 million in LBD, contrary to the alleged representation.

19.  These alleged representations are denied by the Defendants and again, I take the view that it is impossible for me to form any view as to merits of the Plaintiff's case based on the alleged misrepresentations, without hearing oral evidence and having a proper investigation at trial.  Mr Suen relies on the "Group Valuation Materials" and the "Information Memorandum" referred to in the Amended Statement of Claim as showing that the 3^rd Defendant was in need of intense capital funding at the time when the discussions were held between the Defendants with the Plaintiff. He submits that these contemporaneous documents show that the 3^rd Defendant was then in need of intense capital funding and that "this must point to [the Plaintiff] investing in [the 3^rd Defendant] by issues of shares (which can raise funds for the 3^rd Defendant), as opposed to purchasing shares from [the 1^st or 2^nd Defendant] (in which case the proceeds would be pocketed by the [1^st or 2^nd Defendant])".  I do not think that merely because the 3^rd Defendant was in need of funds at the time of the discussions, it necessarily follows that there was a representation made by the Defendants to the Plaintiff that new shares would be issued to the Plaintiff.  It is the Defendants' case that the discussions with the Plaintiff were merely some preliminary discussions, and no agreement was made with the Plaintiff for him to invest in the 3^rd Defendant at all.  Insofar as the Plaintiff relies upon the Group Valuation Materials and Information Memorandum as evidencing a representation by the Defendants, it is to be noted that those documents were prepared by a third party, namely Cushman & Wakefield Capital Asia Limited, and came with express disclaimers.  The scope and effect of these disclaimers may be debatable, but I am not prepared, at this stage, to take the view, as advocated by Mr Suen, that the Plaintiff has an overwhelmingly strong case against the Defendants on the alleged misrepresentation.  I am also unable to accept Mr Suen's submission that "it goes without saying that [the Plaintiff] would not have invested in [the 3^rd Defendant] as he did if he was the only person participating in the fund raising".  The Plaintiff's decision to invest in the 3^rd Defendant may or may not depend on whether there were other investors, or independent investors - this is a matter for investigation at trial.  It is true that the existence of such investors may affect the 3^rd Defendant's ability to successfully raise funds, but it does not follow that the Plaintiff’s decision to invest could only have been made after there had been a representation made to him that there were other independent investors already committed to investing in the company.  As to the alleged representation that HK$10 million would be held on trust and invested in LBD, that was a representation alleged to have been made orally, and obviously this is a matter for investigation at trial.  In his first skeleton filed before the hearing of the appeal, Mr Suen had attempted to refer to the transcripts of the recordings produced in the said Affirmations in support of his submissions on this point, but as I have refused to allow him to rely on the said Affirmations (for reasons already set out above), there is no need for me to deal with those submissions in any detail.  Indeed I have probably said more than I should on the merits of the case.

20.  All in all, while I am prepared to say that the Plaintiff has a bona fide claim against the Defendants, I am not prepared to go anywhere beyond this.  This is not the type of case where it can be readily said that the Plaintiff has demonstrated a high degree of success.  Nor am I prepared to say that the Defendants do not have a bona fide defence to the Plaintiff's claim.

21.  I accordingly reject Mr Suen's submission that this Court should not exercise its discretion to order security for costs as the Plaintiff has a high probability of success.

THE HUMAN RIGHTS ARGUMENTS

22.  As pointed out above, in the present case, it is not disputed that the Plaintiff is a foreign plaintiff, he being ordinarily resident in Singapore.  This being the case, Mr Chan submits that it is ordinarily just for the Court to exercise its discretion to order the Plaintiff to provide security for costs.  He refers me to the decision of our Court of Appeal in Montgomery Ward & Co Incorporated v Evergo Trading Company Limited and Evergo Holdings Company Limited, unreported, CACV 32/1996, 31 May 1996, where Nazareth VP held (paragraph 8):

"Given that there are no proper factors weighing in favour of the foreign plaintiff or at least either way, it seems to me that [the judge 's] discretion plainly had to be exercised in conformity with the position set out in the judgment of Lord Denning in Aeronave SPA v Westland Charters [1971] 3 All ER 531 at 533 where he said this:

"I agree with the note in the Supreme Court Practice that the rule does give a discretion to the court.  In 1984 in Crozai v Brogden Lopes J said that there was an inflexible rule that if a foreigner sued he should give security for costs.  But that is putting it too high.  It is the usual practice of the courts to make a foreign plaintiff give security for costs.  But it does so, as a matter of discretion, because it is just to do so.  After all, if the defendant succeeds and gets an order for his costs, it is not right that he should have to go to a foreign country to enforce the order."

Reverting to the position here, there appear to be no proper considerations or factors that would render it just not to order security.  It is simply that an action has been brought by a foreign plaintiff.  I do not find myself in a position to assess the strength or the weakness of the plaintiff's case.  In those circumstances it seems to me that the discretion should plainly be exercised in the manner that is recommended in the judgment of Lord Denning.  Applying Lord Denning's approach, it seems to me only just that security should be provided to Evergo Holdings the 2^nd Defendant, and that if successful, it should not have to go to America to recover its costs.  Upon that basis, the discretion exercised by Sears J was plainly wrong." (underline added)

23.  The words of the Vice - President cited above reflects the traditional approach of the Court to the exercise of the discretion under O 23 r 1(1)(a): unless there are other considerations to show that ordering security would be unjust, prima facie the discretion should be exercised in favour of ordering security against a foreign plaintiff, as it is just to do so (see, Walt Disney Co v. Disney Property Agency, HCA A7289/1992, 15 March 1993, per Godfrey J).  The reason being, as Parker LJ observed in the case of Berkeley Administration Inc v McClelland [1990] 2 QB 407 at 418F:

 "....... it is, I accept, common for orders to be made on little if anything more than fact of residence outside the jurisdiction, but this is because it is also commonly the case that it is obvious from the pleadings that enforcement of any judgment for costs in the event of the plaintiff's action being dismissed would be difficult and costly to enforce."

24.  However, while it is common for orders for security for costs to be made on little more than the fact of residence outside the jurisdiction, it is plain from the wordings of O 23 r 1(1)(a) that there is no inflexible rule that a foreign plaintiff has to provide security.  There is a discretion to exercise, and there may very well be considerations in a given case that makes it unjust to order security against a foreign plaintiff.

25.  Which brings me to the question as to how the discretion should be exercised and, associated with that question, the "human rights arguments" of Mr Suen. 

26.  Mr Suen submits the operation of O 23 r1(1)(a) is potentially discriminatory.  Relying on the decision of H.H. Judge Lok in the case of  Izumo Mokko Co Ltd v TS Lines Ltd [2007] 2 HKLRD 363, Mr Suen submits that the making of an order for security for costs due to the mere fact that a plaintiff was a foreign resident is discriminatory and unjustified (in the sense of being contrary to the Hong Kong Bills of Rights provided in the Hong Kong Bill of Rights Ordnance, Cap 383 ("HKBOR").  To ensure compliance with the HKBOR, the focus of the Court, in the exercise of its discretion, should be on the additional difficulties and burdens in enforcing a judgment on costs abroad rather than the status of the foreign plaintiff.  This means that the position or status of the foreign plaintiff, including his impecuniosity or financial inability to pay costs, is entirely irrelevant and should not feature in the Court's consideration of its discretion.  Mr Suen's argument in this regard is simple - it is trite law that a local plaintiff would not be made to provide security on the ground of impecuniosity.  If, in the exercise of its discretion to order security, the Court takes into account the impecuniosity of the foreign plaintiff, the Court would be discriminating against the foreign plaintiff by taking against him a factor that cannot be taken if he were a local plaintiff.  This would then be a discriminatory treatment based solely on residence, and Mr Suen submits, is contrary to the HKBOR.

27.  A consequence of Mr Suen's arguments - if they are right - is that even if the Court should exercise its discretion to order security for costs against a foreign plaintiff, the amount of security to be ordered is to be confined to the extra costs and expenses that would have to be incurred by the defendant in having to enforce the order for costs abroad (as compared with the costs and expenses that would be incurred if the order is enforced locally).  This is because the amount of security must reflect only the extra burden assumed by the defendant for enforcement abroad.  Any security imposed that goes beyond this extra burden would be discriminatory against the foreign plaintiff.

28.  In support of his arguments, Mr Suen refers me to the case of Nasser v United Bank of Kuwait [2002] 1 WLR 1868 where the English Court of Appeal had the occasion of considering Articles 6(1) and 14 of the European Convention on Human Rights ("ECHR") which provided as follows:

"6(1) In the determination of his civil rights and obligations.... Everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.

14. The enjoyment of the rights and freedom set forth in this Convention shall be secured without discrimination or any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status."

29.  In Nasser, the English Court of Appeal was concerned with a appellant who was a resident in the United States, against whom an order for security for costs was made under the Civil Procedure Rule ("CPR") r.25.15(1)(a).  That rule provides that the court may order security for costs of an appeal against an appellant on the same grounds as it may order security for costs against a claimant.  Under r.25.13(1) of the CPR, an order for security for costs may be made if the court is satisfied, having regard to all the circumstances of the case, that it is just to make such an order and one or more of the conditions in paragraph (2) applies.  Insofar as it is relevant to the present discussion, paragraph (2) of r.25.13 provides for the conditions, inter alia, as follows:

"(a) the claimant is-

(i)  resident out of the jurisdiction, but

(ii) not resident in a Brussels Contracting State, a State bound by the Lugano Convention or a Regulation State, as defined in section 1(3) of the Civil Jurisdiction and Judgments Act 1982;"

30.  As the appellant in Nasser was a US resident, he was resident out of the jurisdiction of United Kingdom and also not a resident in a member State of the Brussels or Lugano Convention.  Yet, the English Court of Appeal held that it would be "both discriminatory and unjustifiable if the mere fact of residence outside any Brussels/Lugano member state could justify the exercise of discretion to make orders for security for costs with the purpose or effect of protecting defendants or respondents to appeals against risks to which they would equally be subject, and in relation to which they would have no protection, if the claim or appeal were being brought by a resident of a Brussels or Lugano state" (per Mance LJ at paragraph 58). In so holding, the English Court of Appeal referred to and adopted its previous decision in Fitzgerald v Williams [1996] QB 657, which in turn followed the reasoning of a decision of the European Court of Justice ("ECJ") in the case of Mund & Fester v Hatrex International Transport (Case C-398/92) [1994] ECR I-467.  In order to properly understand the Nasser decision, it is necessary to go back to the Mund case and the case of Fitzgerald v Williams.

31.  In the Mund case, the claimant initiated proceedings against the defendant, Hatrex, which was an international carrier having its registered office in the Netherlands.  The claimant took out an application against the defendant for seizure of the latter's property in Germany pursuant to paragraph 917 of the Zivilprozessordnung ("ZPO"), which was the German Code of Civil Procedure.  Under paragraph 917(1) of the ZPO, an order for the seizure of assets would be made when it was feared that enforcement of a judgment would otherwise be made impossible or substantially more difficult.  Sub - paragraph (2) further provided that the fact that judgment was to be enforced abroad would be considered sufficient grounds for a seizure order.

32.  An issue arose before the ECJ as to whether paragraph 917 of the ZPO was compatible with Article 7 of the EEC Treaty, which provided that:

"Within the scope of application of this Treaty, and without prejudice to any special provision contained therein, any discrimination on grounds of nationality shall be prohibited".

33.  The ECJ held that the effect of Article 7 of the EEC Treaty forbade not only overt forms of discrimination based on nationality, but also all covert forms of discrimination which led in fact to the same result.  It was held that paragraph 917 of ZPO was in contravention of Article 7 of the EEC Treaty because it "entail[ed] a convert form of discrimination".  In the words of ECJ (paragraph 16 of the Judgment):

"16  While examination of paragraph 917(2) of the ZPO reveals no overt discrimination based on nationality, since it applies in all cases where a judgment is to be enforced abroad, even if the assets forming the subject of the seizure belong to a German national, it is nevertheless the case that, as the Commission correctly points out, the latter situation is rare, the great majority of enforcements abroad being against persons who are not of German nationality or against legal persons not established in the Federal Republic of Germany.  It follows that the national provision in question leads in fact to the same result as discrimination based on nationality....

 17. However, that finding is not sufficient to conclude that a provision such as that at issue in the main proceedings is incompatible with Article 7 of the Treaty. For that it would also be necessary that the provision in question should not be justified by objective circumstances.

18. .... According to paragraph 91791) of the ZPO, seizure is to be authorized where it is reasonable to fear, in the light of the circumstances of the case, that enforcement of the subsequent judgment would otherwise be made impossible or substantially more difficult.  By virtue of paragraph 917(2), such difficulties are presumed from the mere fact that enforcement is to take place in a State other than the Federal Republic of Germany.

 19.  While such a presumption is justified where the subsequent judgment is to be enforced in the territory of a non-member country, it is not justified where enforcement is to take place in the territory of the Member States of the Community. All those States are Contracting Parties to the Brussels Convention whose territories may be regarded as forming a single entity, as indicated in the Report on the Brussels Convention (Official Journal 1979 C59 p 1, particularly at p 13)." (underline added)

34.  It may be seen from the citations above that the reasons why the ECJ took the view that paragraph 917 contravened Article 7 of the EEC Treaty were two, namely that practically most cases of enforcement of German judgments outside Germany were against non-Germans; and secondly the territories of all members States of the Brussels Convention were to be regarded under the Brussels Convention as forming a single entity.  It was for the 1^st reason that paragraph 917 was regarded as covertly discriminatory, and it is for the 2^nd reason that the discrimination was considered not justified.  It was then the combination of these two considerations that made paragraph 917(2) of the ZPO a provision that was unjustifiably discriminatory, thereby contravening Article 7 of the EEC Treaty.

35.  The effect of the Mund case was considered by the English Court of Appeal in Fitzgerald v Williams [1996] QB 657.  At the time when the Fitzgerald case was decided, the relevant provision for security for costs in England was still O 23 r 1 of the Rules of Supreme Court (the CPR provisions mentioned above were only to come later), which is the English equivalent of O 23 r 1 of the Rules of High Court in Hong Kong.

36.  In Fitzgerald v Williams, an English defendant sought security for costs against an Irish claimant.  The claimant argued that in the light of the Mund case, O 23 r 1 was discriminatory and was in contravention of Article 6 of the EC Treaty (the successor to Article 7 of the EEC Treaty).

37.  Sir Thomas Bingham MR (as he then was) gave a leading judgment of the Court of Appeal (with which Waite LJ and Otton LJ expressed agreement) and held that O 23 r 1(1)(a), "in empowering the court to make orders for security against plaintiffs who were ordinarily resident outside the jurisdiction which it could not make against plaintiffs ordinarily resident within the Order was covertly discriminatory on the ground of nationality since most plaintiffs in England who were resident outside the jurisdiction would not be British" (see Headnote).

38.  The reasoning of the ECJ in the Mund case was adopted by the Master of the Rolls, who held that although O 23r 1(1)(a) was couched in terms of residence, there was nevertheless discrimination on grounds of nationality.    His Lordship explained his reasons as follows (at 674E-675A):

"(iii) Is the rule discriminatory?

The rule plainly empowers the court to make orders against plaintiffs ordinarily resident out of the jurisdiction which it could not make against plaintiffs ordinarily resident within it.... It therefore involves discrimination in the sense used by the European Court of Justice in the Mund case, in that different plaintiffs are treated differently.

(iv) Is that discrimination based on nationality?

 On its face, the discrimination for which the rule provides is based on ordinary residence not nationality.  A British national ordinarily resident abroad may be required to give security, a foreign national ordinarily resident within the jurisdiction may not.  But there is a close analogy with the Mund case: just as most German judgments to be enforced outside Germany would not be against Germans, so most plaintiffs in England ordinarily resident outside the jurisdiction would not be British.  Just as paragraph 917(2) was held to be covertly discriminatory on grounds of nationality, so must the same conclusion follow in relation to the rule.

(v) Is such discrimination on grounds of nationality justified by objective circumstances in relation to those who are nationals of and resident in other member states to the Convention?

 Paragraph 917(2) gave effect to an irrebuttable presumption that a judgment would be impossible or substantially more difficult to enforce if it was to be enforced outside Germany.  The Mund case is clear authority for the proposition that such a presumption is repugnant to the Treaty in so far as it applies where enforcement is to be in another member state party to the Convention..... Since, however, if the foregoing reasoning is correct, a plaintiff suing in England who is a national of and ordinarily resident in another member state party to the Convention has a Community right which the national court must protect not to be the subject of discrimination on grounds of nationality, it is necessary to ask whether any modification of English law or practice is called for to protect that right.  The answer compelled by the Mund case in my view is: the English court should never exercise its discretion under the rule to order security to be given by an individual plaintiff who is a national of and resident in another member state party to the Convention, at least in the absence of very cogent evidence of substantial difficulty in enforcing a judgment in that other member state"

39.  In the subsequent case of Chequepoint SARL v McClelland [1997] QB 51, the same judge (by then Lord Bingham CJ) rejected the submission made in that case that O 23 r 1 was invalid and of no effect in so far as it applied to individuals who were nationals and residents of a member state of the European Community.  O 23 r 1(1)(a) was to be read as if it were subject to a proviso that discretion to order security under the rule should not be exercised in a manner contrary to Community Law (p 59C-D).

40.  It was against this previous development of the law, made in the context of the Treaties and Conventions of the European Community entered into by the United Kingdom, and the modification of domestic legislations in consequence thereof, that the Nasser case was decided.   By the time of Nasser, the CPR had come into effect, and the ECHR had become part of English law (with the enactment of the Human Rights Act 1998 which made it unlawful for the court as a public authority to act in a way which is incompatible with a Convention right: see, Nasser paragraph 54 at 1183A-B).  After referring to the Mund case and Fitzgerald v Williams (in paragraph 53 at 1182F-H), Mance LJ held at paragraph 55 (p.1183B-D):

 "Although the precise phraseology of article 14 of [ECHR] is different to that of article 6 of the Treaty (which speaks simply of "nationality"), I do not think that the two articles can sensibly be distinguished as regards the protection that they may afford in respect of orders against foreign residents for security for costs.  And the national origin of the great majority of foreign residents affected by orders for security for costs under (now) CPR r.25.15(1) read with rule 25.13(2)(a) is likely to be in states not party to the Brussels or Lugano Convention: compare the Mund case and Fitzgerald v Williams, where the fact that the great majority of persons resident abroad, against whom enforcement abroad would take place, would be foreign nationals led to the conclusion that there was illegitimate discrimination...."

41.  By parity of reasoning to that applied in the cases of Mund and Fitzgerald v Williams, Mance LJ held that under the relevant provisions of the CPR, it is likely that the plaintiffs affected by orders for security for costs  made thereunder would not be nationals of the Brussels or Lugano states (against whom no orders for security for costs could be made).  His Lordship went on to hold (in paragraph 58 at 1184C-E) that it would be both discriminatory and unjustifiable if the mere fact of residence outside a Brussels/Lugano member state could justify the exercise of discretion to make orders for security for costs.  In this way, Mance LJ extended the reasoning articulated in Mund and Fitzgerald v Williams for nationality-discrimination, by applying the same to plaintiffs who are residents outside of the Brussels and Lugano member states.

42.  I can readily see why, if Mance LJ is correct (and I think he is correct in this regard) in holding that in practice, the national origin of most plaintiffs affected by orders for security for costs under the CPR are likely to be in states not party to the Brussels or Lugano Conventions, the relevant provisions in the CPR may be said to be discriminatory as regards nationality.  I find it much more difficult, however, to understand why the convert discrimination against nationals of non ‑ Brussels or non - Lugano member States is necessarily unjustified.  It may be recalled that the ECJ itself had emphasized in Mund that the presumption in paragraph 917(2) of the ZPO was only unjustified because it applied to member states of the Brussels Convention.  In paragraph 19 of its Judgment in Mund, the ECJ was at pains to emphasize that if the presumption had been applicable only to non‑member states, it would have been well justified.

43.  Be that as it may, the more important question for present purposes is whether the aforesaid development in England, particularly the Nasser decision, should be applied in Hong Kong.  In my judgment, it does not and should not.

44.  The basis for the human rights arguments of Mr Suen is the HKBOR.  Insofar as it is relevant, the following provisions of the HKBOR may be noted:

(1) Article 1(1) provides that "[t]he rights recognised in the Bills of Rights shall be enjoyed without distinction of any kind, such as race, color, sex, language, religion, political or other opinion, national or social origin, property, birth or other status...

(2) Article 10 provides that "[a]ll persons shall be equal before the courts and tribunals.

(3) Article 22 provides that "[a]ll persons are equal before the law and are entitled without any discrimination to the equal protection of the law.  In this respect, the law shall prohibit any discrimination and guarantee to all persons equal and effective protection against discrimination on any ground such as race, color, sex, language, religion, political or other opinion, national or social origin, property, birth or other status.

45.  It may noted immediately that nowhere in the HKBOR is there any express reference to discrimination on ground of residence.  There is a long list of grounds set out in both Articles 1(1) and 22 against which discrimination is expressly prohibited or protected against (such as race, sex, color, language, nationality etc.), but residence is not included in the list. It is not difficult to understand why that is so.  For residence (in its various forms such as "ordinary residence", "habitual residence" or residence for a specified period of time) within the jurisdiction frequently constitutes a rational criterion for differential treatment under the law, and indeed in some cases, the only rational criterion.  Residence, together with other similar but different concepts such as domicile, is the kind of legal concept that marks a person's connection or relationship with a particular jurisdiction, and it is no surprise that very often a person's legal rights and obligations may rationally depend upon his connection or relation with the jurisdiction in question.  Our law is filled with examples of differential treatments based on residence or residency requirements.  Many professional and civil rights are dependent upon the fulfillment of specific residency requirements.  The Court's jurisdiction is often founded upon proof of residence.  Some examples that immediately come to mind is the Court's jurisdiction over divorce proceedings (see, section 3(b) of the Matrimonial Causes Ordinance, Cap 179), and its jurisdiction to entertain applications for financial relief under s 29AE(b) of the Matrimonial Proceedings and Property Ordinance, Cap 192.  Even a barrister appearing before this Court would have to first satisfy certain residency requirements provided under section 27(2)(b) of the Legal Practitioners Ordinance, Cap 159 before he can get himself admitted as such.

46.  There is then nothing in HKBOR to make differential treatment based on residence per se discriminatory.  Can it be said, applying the reasoning in the Mund case and Fitzgerald v Williams, that the residence distinction built into our O.23 r.1(1)(a) works in practice as a nationality - discrimination?  If the residence distinction is likely to work in practice as a discrimination on the ground of nationality, it may then be said that the HKBOR is engaged and that the rule is potentially discriminatory.  Whether the discrimination is justified or not is of course another question.

47.  In my judgment, one should be careful in applying the reasoning of Mund and Fitzgerald v Williams to a jurisdiction such as Hong Kong.  Hong Kong is of course not a state or country in itself, and there is no such thing as a "Hong Kong national".  It makes no sense to speak in terms of the likelihood of a resident in Hong Kong having a national origin of Hong Kong, and vice versa.  In the context of a jurisdiction that is a State, as in the case of the Federal Republic of Germany, the United Kingdom, or any of the member States of the Brussels and Lugano Conventions, it makes sense to say that a plaintiff suing in the State in question but who is not resident there is likely to be of a national origin not of that State.  Thus a plaintiff suing in Germany and not resident there is likely to be a non - German, as in Mund; and a plaintiff suing in England and not resident there is likely to be a non ‑ British, as in Fitzgerald v Williams.  The same cannot, however, be said of Hong Kong, as residence in Hong Kong is not distinctive or indicative of a national origin peculiar to Hong Kong as a territorial and legal jurisdiction. As Hong Kong is a special administrative region of the People's Republic of China, and populated mostly by Chinese, it may be assumed that a majority of its residents is of Chinese nationality, but it cannot be said that a plaintiff suing in Hong Kong and not ordinarily resident here is likely to be a non - Chinese.  Just across the border of Hong Kong is a jurisdiction populated by more than a billion people of Chinese nationality, and in these days where many litigations in Hong Kong involve plaintiffs from the Mainland, it cannot be readily said that a plaintiff suing in our Courts but not resident here is likely to be of non-Chinese origin.  A Chinese plaintiff, whether ordinarily resident in the Mainland or anywhere else outside Hong Kong, would be subject to the same jurisdiction as regards security of costs under O 23 r 1(1)(a) as any other foreign plaintiff not resident here.

48.  Accordingly, in terms of discrimination based on nationality, I do not think that it is possible to apply the reasoning in Mund and Fitzgerald v Williams (and in this regard, Nasser too) to the Hong Kong rule. I do not consider that the residence distinction in O 23 r 1(1)(a) operates in practice as a nationality-discrimination.

49.  In any event, even if I am wrong and O.23r.1(1)(a) does have a nationality - discrimination effect, I do not think that such discrimination, based as it is ultimately on the criterion of ordinary residence, is necessarily unjustified.  The ECJ, as pointed out above, held in the Mund case that if the presumption in paragraph 917 of ZPO was not applicable to member states, the nationality - discrimination created by the presumption would have been quite justified.  It is plain from the judgment of the ECJ that the discrimination found in the Mund case was only held to be unjustified because of the political and economical union that member States of the Brussels Convention had associated themselves to form "a single entity".  This is a consideration peculiar to the European Community (now the European Union) and is a consideration wholly inapplicable to Hong Kong.  Our O 23 r 1(1) contains no irrrebutable presumption as in the case of paragraph 917 of ZPO, and in the absence of a special consideration such as that alluded to by the ECJ, I see no reason why the discrimination, created only indirectly by the residence - distinction, should be held unjustified.

50.  Caution must be exercised in applying Nasser to Hong Kong.  In Nasser, the English Court of Appeal was dealing with a rule of different wordings (i.e. the CPR) which were couched in terms to ensure compliance with the treaty obligations of the United Kingdom as a member of the European Union.  I do not think that the Hong Kong courts should be too "trigger-happy" in embracing the recent developments of this area of the law in the United Kingdom, as those developments were no doubt motivated by a political, economic and legal setting that has no application to this jurisdiction.  The changes to this part of the English law have been strongly motivated by community law and the United Kingdom's treaty obligations, and it is not right, in my judgment, to transplant these changes to Hong Kong, absent an amendment to the legislation.

51.  One other consequence brought about by the Nasser decision to the English law is that nowadays, the amount of security ordered under the relevant rule in the CPR is confined to the extra costs that may have to be incurred by a defendant in enforcing a costs order abroad.  No account may be taken of the impecuniosity of the plaintiff or his financial ability to meet his costs obligation.  It is the extra costs and expense that may have to be incurred to meet the additional difficulties and burdens of enforcement abroad that is focus of the assessment of quantum.  The status of the plaintiff has become either irrelevant or of marginal importance both in terms of the exercise of the discretion and the assessment of the amount of security to be ordered: see, for example, Texuna International Ltd v Cairn [2004] EWHC 1102, Al-Koronky & Another v Time Life Entertainment Group Ltd & Another [2005] EWHC 1688, Prince Radu of Hohenzollern v Houston [2006] EWHC 231 and Relational LLC v Hodges [2011] EWCA Civ 774.

52.  For reasons above, I do not consider that O 23r 1(1)(a) is discriminatory or potentially discriminatory, and I reject Mr Suen's submissions in this regard.  In my view, the Hong Kong courts are free to exercise its discretion without any of the fetters or constraints advocated by Mr Suen based on the Nasser decision.  In Izumo Mokko Co Ltd v TS Lines Ltd (supra), H H  Judge Lok expressed the view that:

     "In view of the development of the English jurisprudence on the exercise of the discretion in a manner which is compatible with the human rights legislations, the Hong Kong courts, in deciding whether to order a foreign plaintiff to provide security for costs, should now focus on the difficulties faced by the defendant in enforcing the judgment rather than on the status of a particular plaintiff.  Nasser should now reflect the modern approach, and I am prepared to accept Mr Kerry's submission to such extent."

     For the reasons set out in this Decision, I respectfully disagree.  The Izumo Mokko case is not binding on me, and I refuse to follow it.

53.  In refusing to follow the lead of Nasser, I am in no way suggesting that the existence of obstacles and difficulties, if any, in enforcement abroad is not a material consideration in the exercise of discretion. Plainly that is a very material consideration, and in some cases may well be the only material consideration.  The consequence of my decision that there is no question of discrimination in O 23 r 1(1)(a) is simply that, in my view, the discretion of the Hong Kong courts under the relevant rule as to what is just "having regard to all the circumstances of the case" is unfettered by the considerations in Nasser.  The status of the plaintiff often constitutes an important part of the circumstances of the case and can - indeed should - be taken into account.  When the rule requires the Court to have regard to all the circumstances of the case, it means nothing less than that.  Difficulty of enforcement abroad is merely one factor to be considered.  Not only is it not conclusive, it is not the only factor to focus upon: see, Giuseppina Tagliani v Lee Wai Yin, Elvis, HCPI 878/2003, unreported, 12 September 2005, Muttrie DJ; Jollymex N V v Jollybaby International Limited, HCA 828/2006, unreported, 28 March 2007, Saw J.

54.  The English cases before the recent development in that jurisdiction have been clear that in the exercise of the Court's discretion, it is entitled to, and should, take into account matters relating to the status of the plaintiff, including his impecuniosity.  I need only refer to the decision of the English Court of Appeal in Thune v London Properties Ltd [1990] 1 WLR, where Bingham LJ (as he then was) held:

      "In approaching that question it cannot be too emphatically stated that the impecuniosity of a personal plaintiff is never of itself enough to confer on the court a discretion to order security.  It is not a ground in Ord 23 r 1(1) and section 726(1) of the Companies Act 1985, like its predecessor, only applies to limited companies.  But I am for my part firmly of opinion that it is a matter which the court may, and in a proper case should, consider in exercising a discretion where power to make an order is established.  For that opinion I give a number of reasons. 1. In considering "what, in all the circumstances of the case, is the just answer...  in balancing the respective interests of the plaintiff and the defendant so as to produce that result which is most fair, it is in my view irrational to exclude from consideration a matter which is of major importance to one of them, perhaps on the facts not less important than ease of enforcement. 2. Since heads (b), (c) and (d) of rule 1(1) are all concerned, to a greater or lesser extent, with the risk that the defendant may not be paid his costs if successful... it would be strange to treat this matter as altogether irrelevant in the exercise of a discretion established by virtue of paragraph (a). 3. In Bank Mellat v Helliniki Techniki SA [1984] QB 291, the financial position of the plaintiff was treated as a factor relevant, not in any real sense to establishing jurisdiction, but to the exercise of discretion.... 4. [Reference to Lord Donaldson MR's judgment in the case of De Bry v Fitzgerald [1990] 1 WLR 552] ... 5.  In the standard one-ship case referred to by Parker LJ in Berkeley Administration Inc v McClelland [1990] 2 WLR 1021, 1028D, in which orders are ordinarily made almost automatically, it is the risk that there will be no assets as much as the risk of procedural difficulties of enforcement which lead to an order being made. 6. When holding that an order for security could be made against an insolvent Northern Irish company in DSQ Property Co Ltd v Lotus Cars Ltd [1987] 1 WLR 127, Millett J cannot have regarded the company's insolvency as relevant to the question whether it was resident out of the jurisdiction.  It can only have been relevant to the exercise of discretion once residence out of the jurisdiction was established.  7. In Tradinaft SA v Botany Bay Shipping Company (Australia) Proprietary Ltd (unreported), a judgment delivered by Hobhouse J on 24 November 1989 the judge plainly regarded it as relevant to the exercise of his discretion under Ord 23, r 1(1)(a) that the claimants were well established and had substantial assets and that there was nothing relevant to the individual position of the claimants."

55.  I agree with what Bingham LJ said in the case of Thune and would hold that this continues to represent the law in this jurisdiction.

56.  Accordingly, in exercising my discretion in the present case, I do not consider that my discretion is in any way inhibited and if there had been evidence concerning the status and financial ability of the plaintiff, I would have taken the same into account.

THE PRESENT CASE

57.  Having disposed of the legal arguments raised in this case, I would now turn to consider the exercise of my discretion.  As I already noted above, there is a paucity of evidence put before the Court relevant to the exercise of my discretion.  There is little or no evidence of the plaintiff's financial position (except that he has a bank account in Hong Kong with a bank balance of about $300,000) and no evidence concerning what assets he might have in Singapore.  There is no evidence filed on any special difficulties or burdens for enforcing judgments of costs in Singapore.  Indeed the only evidence concerning enforcement in Singapore is contained in a single paragraph (paragraph 19) in the 1^st Affirmation of the Plaintiff filed on 14 January 2011 as follows:

     "Further, I understand that there are provisions for reciprocal enforcement between Singapore and Hong Kong SAR.  I see no difficulty for the Defendants to enforce the judgment in their favour against me."

58.  The burden is upon the Defendants to satisfy me that it is just to make an order for security for costs.  It is accepted, as indeed is well-settled, that there is no inflexible rule to order a foreign plaintiff to provide security for costs, although, as mentioned above, the approach of the court is to order security unless there is anything to show that it is not just to so order.   It might be said that there is an evidential burden on the plaintiff to adduce some evidence to displace the initial inclination to order security (described by Godfrey J as the prima facie position in Walt Disney Co V Disney Property Agency, supra), but the legal burden rests always with the defendant making the application to satisfy the Court that it is just to make the order.

59.  When Counsel filed their first set of submissions before the hearing of the appeal, there was no reference to the legal regime concerning reciprocal enforcement of judgments between Singapore and Hong Kong.  I therefore directed that supplemental submissions be filed on the legal regime relevant to reciprocal enforcement between the 2 jurisdictions.

60.  To my surprise, when the supplemental submissions were filed, they contained a lot of materials not only on Hong Kong law, but also on Singaporean law.  While I appreciate the efforts of Counsel in their research, I do not think that it is right for Counsel to make submissions on Singaporean law.  Foreign law is a matter of fact to be proved by evidence.  If the parties wish to make reference to Singaporean law, they should have filed proper evidence on the same.  There is, however, no evidence filed in this regard and I do not think that it is right for Counsel to seek to fill the evidentiary vacuum by way of submissions.

61.  Be that as it may, what is clear is that as far as Hong Kong law is concerned, the Foreign Judgments (Reciprocal Enforcement) Ordinance, Cap 319 ("FJREO") provides (in section 3) that the provisions of the Ordinance regarding the enforcement in Hong Kong of judgments given in the superior courts of any foreign country would be extended  to a foreign country only where the Governor in Council was satisfied that "substantial reciprocity of treatment will be assured as respects the enforcement in that foreign country of judgments given in the superior courts" of Hong Kong. Judgments given in the superior courts of Hong Kong include judgments given in the Court of First Instance and judgments given on appeal (see, section 2 of FJREO).

62.  By paragraph 2 of the Foreign Judgments (Reciprocal Enforcement) Order (Cap 319A) ("the Order"), the Governor in Council extended the provisions of FJREO to, inter alia, Singapore (see, the First Schedule to the Order).  In the Preamble to the Order, it was expressly stated that the Governor in Council was satisfied that the benefits conferred by FJREO having been extended to judgments given in the superior courts specified in the First Schedule, substantial reciprocity of treatment has been or will be assured as respects the enforcement of judgments given in the superior courts of Hong Kong.

63.  I think I am entitled to infer from this that in Singapore, the procedure for enforcement of a Hong Kong judgment would be substantially similar to that provided in FJREO.  This is, after all, what "substantial reciprocity" means in FJREO.

64.  In the absence of any evidence filed by the Defendants to show, for example, that despite the substantial reciprocity, there exists some special difficulties and burdens for enforcement in Singapore which they would not encounter if the enforcement is done in Hong Kong, I cannot assume that there are any difficulties for enforcement in Singapore that are particular to that jurisdiction.  The evidential burden is discharged by the Plaintiff's showing that there is an available regime which provides for reciprocal enforcement of judgments in Singapore.  This is of course not conclusive but the burden rests with the Defendants to show that nonetheless, it is just to require the Plaintiff to provide security. 

65.  I have also taken into account the fact that Singapore is an English-speaking country and there is not going to be any language difficulties in communicating with Singapore lawyers instructed to pursue enforcement in that jurisdiction.  I also take judicial notice that Singapore has a common law system and the present case is not a case whereby enforcement would have to be taken in a country with a legal system that is wholly foreign to a Hong Kong defendant.  It is true that the Defendants would still have to instruct a foreign lawyer, but that is, in my view, a matter of minor importance given the considerations mentioned above.

66.  It is also true that under the reciprocal enforcement scheme provided in FJREO, the registration of a foreign judgment may be set aside in certain circumstances, and I shall assume that since there is substantial reciprocity (see section 6 of FJREO), there are similar provisions in the corresponding Singaporean legislation giving effect to reciprocal enforcement of Hong Kong judgments.  However, I find it difficult to imagine what grounds could possibly be open to the Plaintiff to apply to set aside the registration of a costs order made by the Hong Kong Court.  I dismiss that as a nothing but a fanciful possibility.

67.  There is no evidence before me of any exchange control regulations in Singapore to prevent or delay the transfer of any proceeds of enforcement obtained by the Defendants in Singapore to Hong Kong.   I have already noted above that there is no evidence put before me to suggest impecuniosity on the part of the Plaintiff, or any particular risk of his not being financially able to meet an order for costs made by the Hong Kong Court.

68.  Mr Chan asked me to take into account the fact that the Plaintiff had used a Hong Kong address in the Writ, which he submitted was obviously false, and he asked me to infer from it that the Plaintiff had an "intention to defeat any enforcement actions by the Defendants".  I am unable to draw any such inference.   The fact that the Plaintiff was all along resident in Singapore was a fact well known to the Defendants and I cannot see how the Plaintiff could have intended to use a Hong Kong address to deceive the Defendants into thinking that he was resident in Hong Kong.  In any event, as I have pointed out above, when the Defendants raised the matter with the Plaintiff, the Plaintiff's solicitors readily accepted that the Plaintiff was a Singaporean resident and provided to the Defendants' solicitors his address in Singapore (see, letter of Tsang & Lee dated 12 November 2010).  I am unable to draw the inference which Mr Chan invited me to draw.

69.  As rightly submitted by Mr Chan, the existence of a regime for reciprocal enforcement between Singapore and Hong Kong is plainly not conclusive, but that does not mean that in the absence of any evidence filed by the Defendants to show why it is just to make an order for security for costs, that this Court should proceed to make an order simply because the Plaintiff is not ordinarily resident in Hong Kong.  The fact that there is such reciprocal enforcement, in the absence of other relevant evidence, shows that it is not just to make an order under O 23 r 1(1)(a).

70.  I would add, for completeness' sake, that after the hearing, the Plaintiff has drawn my attention to the recent decision of Kwan JA in Atal Technologies Limited v Stratech Systems Limited, HCCT 56/2006 and HCCT 3/2007 and the parties have made written submissions on the effect of the decision. I have placed little reliance on the decision as I consider that it is a decision that is decided on a different rule (ie O 59 r 10(5) of the Rules of High Court) and concerns an application for security for costs of an appeal to the Court of Appeal.  In deciding whether to grant security for costs of an appeal, the Court of Appeal is concerned with the question of whether there are "special circumstances" that make it just to order security for the costs of an appeal.  This is a jurisdiction different from that provided under O 23 r 1, and as noted by the learned editors of Hong Kong Civil Procedure 2012 (see, 59/10/25), while cases decided on O 23 may provide some guidance in relation to the exercise of the court's discretion in deciding whether to award security for the costs of an appeal, "caution must be exercised when seeking to rely on a case decided on O 23 as the basis for resisting the award of security for the costs of an appeal to the Court of Appeal".  The principles governing the award of security for costs at the Court of Appeal stage are "wider and stricter" than those applicable to the award of security for costs in the court below.  At that stage there is already a decision or determination by the court below and it is prima facie an injustice to a respondent to allow an appeal to the Court of Appeal to proceed without security for costs being furnished in circumstances where the respondent will be unable to enforce against the appellant any order for costs made by the Court of Appeal.  I have therefore placed little reliance on the Atal case, as indeed it is unnecessary for me to refer to that case on any matter of principle raised in the present case.

71.  In these circumstances, I am not satisfied that it is just for me to exercise my discretion to order security for costs in this case.  The appeal of the Defendants is dismissed.

ORDER

72.  The appeal of the Defendants is dismissed.  I make a costs order nisi that the costs of the appeal be paid by the Defendants to the Plaintiff, to be taxed if not agreed.