Anwide Co. Ltd. v. Attorney General

IN THE COURT OF APPEAL

1994, No. 133
(Civil)

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J U D G M E N T

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Godfrey, J.A. :

1. Drug trafficking is one of the scourges of the modern world. In order to try and put a stop to this appalling phenomenon, there is much international co-operation.

2. Hong Kong provides some assistance to this end. By the Drug Trafficking (Recovery of Proceeds) Ordinance, Cap. 405 and delegated legislation made thereunder, the legislature has attempted to make sure that the proceeds of drug trafficking are diverted from the pockets of the traffickers to some more worthy cause. The legislation provides that, on an application made ex parte by or on behalf of the government of a designated country, the High Court may register an "external confiscation order" is relation to property in Hong Kong. (An "external confiscation order" is one made in a designated country for the purpose of recovering payments or other rewards received in connection with drug trafficking or their value: see ss. 28 and 29 of the Ordinance.)

3. Proceedings for the registration of an "external confiscation order" are governed by Order 115 of the Rules of the Supreme Court. This, among other things, enables the person against whom such an order is made to apply to a judge to vary or set aside the registration of an "external confiscation order": see Order 115, rule 18.

4. In the present case, the Attorney General has obtained the registration of an "external confiscation order", on the application of the government of the United States of America, against one of the defendants, Anwide Co. Ltd., to which I shall refer as "Anwide"; and Anwide has, very belatedly, applied to set it aside. But Jones J. has ordered Anwide to put up $544,000 as security for the plaintiff's costs of Anwide's application, which is due to be heard in September. Anwide (which accepts that it is impecunious and, what is more, well out of time for making its application) says that Jones J. had no jurisdiction to make an order for security for costs against it. Anwide, it says, is a defendant in the proceedings brought against it under this legislation. It is neither a plaintiff, nor a person in the position of plaintiff.

5. The Attorney General says that Anwide's considerable delay in bringing on its application, and the seriousness of the matter (including allegations which Anwide has made against the persons responsible for obtaining the "external confiscation order") has operated to place Anwide in a position of an "actor", not a "reactor", as Mr. Denis Mitchell Q.C., for the Attorney General, put it in argument. The question for this court is whether that is right.

6. Mr. Mitchell concedes that the application which Anwide now seeks to make is no different in nature from that which it would have been had it been made in time. He accepts that the application made by Anwide is not an originating process, or a cross-action, of any sort. But, he says, it is original in this sense that so much time has gone by and now it is Anwide which goes on the attack, to relieve itself of the burden imposed on it by the registration of the "external confiscation order".

7. The most recent case on the subject of security for costs in a case in which security for costs is sought by a plaintiff against a defendant is C.T Bowring & Co. (Insurance) Ltd. v. Corsi & Partners Ltd. (reported only, so far as this court is aware, in "The Times" newspaper for 28 June 1994) a decision of the (English) Court of Appeal. In the judgment of Dillon L.J. as there reported we find this:

"Accordingly, his Lordship would say that the natural meaning of the term "plaintiff" in a context of litigation was the plaintiff in the proceedings as a whole or original proceedings."

8. Dillon L.J. went on to say that he rejected the submission that:

"by route of the definition of 'plaintiff' in section 225 an impoverished corporate defendant who made an application by interlocutory summons or motion in some other plaintiff's action thereby constituted itself a 'plaintiff' which could be ordered to give security for the costs of its application under section 726 of the 1985 [Companies] Act. 'Plaintiff' in section 726 bore its ordinary meaning and that did not include a defendant which made an interlocutory application.

If a defendant, including a foreign defendant or a defendant which was an impecunious company, put in a defence which was extravagant and without foundation, the plaintiff might be able to have the defence struck out as an abuse of process, or, in an appropriate case, to obtain summary judgment under Order 14.

But there was no case in which it had been held, or could be held, that if a defence could not be struck out but appeared, on a preliminary trial on affidavits and statements without cross-examination, to be weak the defendant ought to be ordered to give security for the plaintiff's costs of the action."

9. The Attorney General accepts all this but maintains that we have here something in the nature of a new or independent claim made by Anwide and that accordingly the judge was right to order Anwide to put up security for the costs of its application.

10. Not without regret, I find myself unable to accept the submissions of the Attorney General. I remind myself that we are not concerned here with the merits of Anwide's case (which appear to be jejune but which are a matter for the judge who will have to determine Anwide's application). We have to consider only the question whether the judge had jurisdiction to make an order against Anwide, which is a defendant in the Attorney General's proceedings, to put up security for the plaintiff's costs of Anwide's application in those proceedings to relieve itself of the burden of the registration of the "external confiscation order" made against it. It seems to me (and I come to this conclusion with considerable reluctance having regard to all the circumstances of this case) that the submission to the contrary made to us by Mr. Louis Chan on behalf of Anwide is correct. It is not a matter of discretion. The court simply has no jurisdiction to direct Anwide to give security for the plaintiff's costs of Anwide's application, which is in the nature of a defensive application, designed to unburden itself from the order obtained against it ex parte by the Attorney General, just as it would have been a defensive application had it been made within rather than out of time. The fact that it is out of time cannot, it seems to me, in any way change the nature or character of Anwide's application.

11. For these reasons, I am of the opinion that this court has no option but to allow this appeal and discharge the order made by Jones J. for security to be given by Anwide for the costs of its application.

Mortimer, J.A.:

12. I also think in the circumstances of this case that Anwide is not in the position of a plaintiff and that the court has no jurisdiction to make the order which Jones J. made in the court below. I agree with everything that my Lord has said and I do not think I can usefully add to the reasons he gave.

Power, V-P:

13. I also concur and have nothing to add. The appeal is accordingly allowed, with costs here and below.