TO KIN WAH v. TUEN MUN DISTRICT OFFICER AND OTHERS

CACV 358/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 358 OF 2004

(ON APPEAL FROM hcal nO. 105 OF 2002)

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REASONS FOR JUDGMENT

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Hon Yeung JA (giving Reasons for Judgment of the Court):

1.  On 6 September 2005, we dismissed the appeal with costs, but allowed the appellant until 5 p.m. on 30 September 2005 to pay into court the security of costs ordered by Cheung JA (the judge). We indicated that we would give our reasons in writing and this we now do.

2.  Tsing Wang Kun (“TWK”), a Taoist Temple, is a t’ong within the meaning of the New Territories Ordinance.

3.  The 2^nd to 4^th respondents (the respondents) were appointed managers of TWK, which appointment was approved by the 1^st respondent – the District Officer of Tuen Mun under the Ordinance.

4.  The decision of the Court of Final Appeal in Secretary for Justice v To Kan Chi & Others [2003] HHCFAR 481 resulted in a large sum of money to the benefit of members of TWK, which sum is being placed in a HK Bank account to the direction of the Court.

5.  Not being satisfied with the appointments of the respondents as managers of TWK and the approval of such appointments, the appellant, as a member of TWK, sought to challenge them by way of judicial review in HCAL 105 of 2002.

6.  On 27 August 2004, Tang J (as he then was) dismissed the appellant’s application with costs. The appellant appealed.

7.  The respondents then sought, by way of summons dated 11 April 2005, security for their costs of the appeal of about $1.2 million on the basis that, (i) the appellant was impecunious; and/or (ii) the appellant was a resident outside the jurisdiction.

8.  On 3 June 2005, the judge ordered the appellant to pay into court $700,000.00 as security for the respondents’ costs of the appeal with the usual consequential directions.

9.  The appellant appealed against the judge’s order out of time. The period of delay was about 10 days and the reason for such delay was the inadvertence on the part of the appellant’s legal adviser.

10.  Mr Leong SC, on behalf of the respondents, objected to any extension of time, relying on S of J v Hong Kong Yaumati Co Ltd [2001] 1 HKC 125.

11.  Mr Leong suggested that where the delay was caused by the ‘inexcusable’ conduct of the applicant’s solicitors, the extension of time would only be granted if the party seeking the extension could demonstrate a real prospect of success on merits.

12.  Whether to grant an extension of time to appeal involves the exercise of discretion and every relevant factor should be taken into account.

13.  Delay and/or negligence attributable to the appellant’s legal advisers rather than the appellant himself is not necessary a factor against the appellant (see Chiu Butt-york v Chiu Kwok-lim [1980] HKLR 459).

14.  The facts in Hong Kong Yaumati (supra) indicate that the refusal to extend would not preclude the applicant from having the question raised in an O14A application from being determined at trial, a factor very much relied on by the presiding judge.

15.  The presiding judge in Hong Kong Yaumati (supra) observed that “although the existence of prejudice to a would-be respondent is a ground for refusing an extension of time, the converse is not true: the absence of prejudice to a would-be respondent is not a ground for extending time”.

16.  With respect, “prejudice” is just one of the relevant factors in determining whether extension of time should be granted.

17.  We were persuaded that in determining if an extension of time to appeal should be granted and in the exercise of discretion, the court should have regard to principally the four relevant factors enunciated in Norwich and Peterborough BS v Steed [1991] 1 WLR 454, namely (1) the length of the delay; (2) the reasons for the delay; (3) the chances of the appeal succeeding if an extension of time is granted; and (4) the degree of prejudice to the respondent if the application is granted.

18.  We also venture to suggest that none of the aforesaid factors is decisive and the weight to be attached to those factors depends on the facts of each case.

19.  We were not persuaded that the appeal should be disposed of simply by refusing an extension of time to appeal and we proceeded to consider the merits of the appeal.

20.  The judge did not agree that the appellant was ordinarily residing out of Hong Kong as according to the appellant, between 1 January 2004 and 28 March 2005; he only spent about 21 nights outside Hong Kong.

21.  The judge rejected the respondents’ case based on such allegation.

22.  However, the judge concluded that the appellant was indeed impecunious and was unlikely to be able to pay the respondents’ costs of the appeal if he was unsuccessful.

23.  The judge took the view that the costs order in favour of the appellant would be set off against the costs order made against him by Tang J (as he then was) and hence did not assist the appellant. 

24.  The judge also took the view that the appellant’s interest in the properties held by TWK was only a contingent interest and could not be readily used to meet any adverse costs order against him.

25.  The judge took into account the merits of the appellant’s appeal before deciding a reduced amount of $700,000.00, having taken into consideration the complexity of the case, to be appropriate as security for the respondents’ costs of the appeal.

26.  There could be no dispute that the appellant had little ready and available assets despite his originally unsupported assertions to the effect that “he had the support of his family, which had significant liquid and property assets”.

27.  The appellant is about 40 years old with only primary education. He is a decoration worker in Hong Kong and has to support his wife whom he married in 1996. The appellant lives with his wife in a rented house in Dongguan, Guangdong although he does come to Hong Kong to work every day.

28.  The address used by the appellant in his affirmations appeared to be an illegal structure at Nai Wai, Tuen Mun in the New Territories.

29.  Mr McDonnell Q.C., on behalf of the appellant, adopted a different approach from that of his predecessor before the judge. He, not only conceded that the appellant was indeed not a man of any assets, sought to rely on it by suggesting that an order of security for costs would have the effect of stifling the appeal.

30.  On the other hand, Mr McDonnell suggested that the appellant was not “impecunious” for the purpose of an application for security for costs because as one of the 500 members of TWK, he would be entitled to share significant sums belonging to TWK. The appellant said that the respondents, as managers of To Ka Yi Tso, were also liable to pay him $55,000.00.

31.  Mr McDonnell pointed out the various costs orders made in favour of the appellant against the respondents both before and after the judge’s order for security of costs. The untaxed bills of costs under those orders, on the appellant’s account, amount to about $1.5 million.

32.  The suggestion was that the respondents already had security of costs by reason of the costs orders in favour of the appellant. By ordering the further security, the respondents were secured not only in respect of their costs of the appeal, but their costs of the hearing before Tang J as well.

33.  Mr McDonnell argued that the judge was wrong to take into account Tang J’s costs order against the appellant when it was the subject matter of an appeal and that the respondents were not entitled to be secured in respect of such costs order as well as the costs of the appeal.

34.  Mr McDonnell further suggested that the respondents have no right to choose the costs order in favour of the appellant as set-off against Tang J’s costs order and then seek to obtain further security for the costs of the appeal.

35.  In any event, Mr McDonnell pointed out that the respondents had not provided particulars of the costs of the hearing before Tang J.

36.  Counsel had also addressed us on the merits of the parties’ respective cases.

37.  We found it neither necessary nor desirable to express too strong a view on the issue of merits.

38.  Suffice it for us to say that the parties’ merits in the present case were not factors of decisive effect, certainly not in favour of the appellant.

39.  Order 59 r 10(5) gives the court the power, which is largely an exercise of discretion, to order security for costs where there are special circumstances making it just to do so and one recognized situation of special circumstances is where the appellant is impecunious: see Hong Kong Civil Procedure 2004 Vol 1 at para 59/10/29.

40.  Once impecuniosity is established, the usual practice is to require the appellant to provide security for costs although the court retains a residual discretion when there are countervailing factors.

41.  The rational for ordering security where the appellant is resident aboard is that enforcing a costs order against a non-resident will likely put a successful respondent to difficulty in terms of undue delay and/or undue expenses in enforcing any costs order: see Hong Kong Civil Procedure 2004 Vol 1 at para 59/10/30-31.

42.  Tang J dismissed the appellant’s application with costs. It has not been suggested the respondents were entitled to any security in respect of those costs. However, in determining if there was a risk of the respondents not being able to recover the costs of the appeal should they be successfully, the outstanding costs order against the appellant must be relevant.

43.  The judge was entitled to take such costs order into consideration. Once that was done, it became clear that the amounts involved in Tang J’s costs order and the costs of the appeal would exceed the amounts of the costs orders in favour of the appellant.

44.  Mr McDonnell then suggested that the security ordered by the judge had the effect of stifling the appeal and hence infringed the appellant’s right to a fair and public hearing guaranteed under Article 10 of the Hong Kong Bill of Rights and Article 14 of the International Covenant on Civil and Political Rights 1966 as applied by Article 39 of the Basic Law.

45.  With respect, Mr McDonnell’s suggestion was nothing more than a contention that security for costs should not be awarded because it would prevent the appellant from pursuing his appeal.

46.  We did not find it necessary to deal with the practice of the Court of Appeal in England consequent upon the introduction of the Human Right Act 1998. The authorities, both in England and in Hong Kong appeared also not supportive of the appellant’s case.

47.  Suffice it to say that the appellant had not raised the issue before the judge. Indeed, the appellant’s case before the judge was that he had adequate personal assets as well as the support of his family.

48.  A bare suggestion in counsel’s written submission in the following terms: “the discretion is sufficiently wide for the court not to so order (security for costs) if the court comes to the conclusion from the evidence before it, that the appeal would probably be stifled as a result (with or without the appellant having made out such a case)”, did not, in the present case, give rise to the issue of “a stifled appeal”

49.  For the first time and in support of the appeal, the appellant asserted that the order for security for costs “was likely to stifle my appeal”.

50.  However, the appellant had furnished neither particulars nor evidence to show how he was unable to furnish security for costs or why he was unable to raise the money elsewhere.

51.  The appellant had started and continued with the prolonged litigation. The background certainly shows that the appellant had the means to meet the costs of the litigation. There was no indication, indeed no suggestion, of any change of circumstances.

52.  The bare assertion that the order for security of costs would stifle the appeal was not made out at all.

53.  The judge took the view that the appellant was ordinarily residing in Hong Kong and therefore he did not take it as a factor against the appellant. That approach was a most lenient view taken in favour of the appellant.

54.  Whether the appellant was “technically” residing Hong Kong, the fact that he had a family in, and had closed connection with Dongguan, Guangdong would certainly put the respondents to greater difficulty in terms of undue delay and/or undue expenses in enforcing any costs order. As the respondents had filed no respondents’ notice in respect of the judge’s finding on such issue, we would say no more about it.

55.  In all the circumstances, we were not persuaded that the judge had wrongly exercised his discretion in ordering the appellant to furnish security for costs. The judge was also entitled to conclude that an appropriate amount for the security was $700,000.00.

56.  The appeal against the judge’s order was therefore dismissed.