XCHRX Universe Link Industries Ltd. And Another v. Liggars Ltd.

CACV 182/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 182 OF 1998

(On appeal from HCMP No. 4001/1997)

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J U D G M E N T

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Godfrey, J.A. :

1. This is an application for security for costs. It is made by the respondent in Civil Appeal No. 182/1998. This is a mortgagor's appeal in the mortgagee's action for payment and possession, which has succeeded. I am told that the mortgage debt is around HK$700 million. The value of the property falls well short of that. Civil Appeal No. 182/1998 was an appeal launched together with another appeal, Civil Appeal No. 183 of 1998, in proceedings in which the mortgagor had sought declarations as to the validity of the mortgage.

2. In Civil Appeal No. 183/1998, the mortgagee made an application for security for costs, which I granted. The security for costs for which my order provided was not given and Civil Appeal No. 183/1998 now stands dismissed.

3. This appeal was listed to come on with Civil Appeal No. 182/1998. But no application for security for costs was made in relation to Civil Appeal No. 182/1998 until this present application was made, on 3 February 1999 (notwithstanding that the appeal itself was launched as long ago as 9 November 1998).

4. Civil Appeal No. 182/1998 is due to be heard on Friday, 12 February 1999, only a week away. This application is accordingly made very late. It is an application which could and should have been made together with the application for security for costs in Civil Appeal No. 183/1998, but it was not.

5. When the order for security for costs in that appeal was made, on 23 December 1998, it allowed 14 days for the lodgment of the security. That period of 14 days expired on 6 January 1999. It was not until a month after that that this application was made.

6. Mr. Yeung, for the mortgagee, in a careful and helpful argument, told me that his side had done what it could to ensure that Civil Appeal No. 183/1998 was going to be prosecuted by writing at least twice to the other side to find out. But they did not receive the courtesy of a reply. In those circumstances, says Mr. Yeung, it should not be surprising that this application has been made now. If the other side had troubled to give a reply, the mortgagee could have been satisfied that the mortgagor's appeal was serious.

7. As it is, it was not until this morning that the mortgagee was told, as this court was told, that the mortgagee does seriously intend to prosecute the appeal, and indeed has briefed counsel for the purpose of arguing it next Friday.

8. Weighing all these matters in the balance, I am of the firm opinion that it would be oppressive now to order security for the costs of an appeal which is to be heard as early as next Friday. The evidence, though it is somewhat exiguous, is to the effect that if an order is made for security for costs to be given very soon, it may not be possible for the mortgagor to give that security by way of a payment into court. I am unable to speculate as to whether some mode of giving security might be devised which would enable it to be given before next Friday, but since no such application for security was made in Civil Appeal No. 182/1998 (as it could have been made) together with the application successfully made in Civil Appeal 183/1998, I am in any event satisfied that at this very late stage it would be quite wrong to order security for costs to be ordered now.

9. The failure of the mortgagor's solicitors to respond to the letters of the mortgagee's solicitors about the mortgagor's intentions as to the appeal is not a matter which ought to affect my decision on the substance of the matter. This matter may, however, prove significant in relation to the decision which I shall have to make as to the costs of this present application.

10. This application will therefore be dismissed but I will hear counsel on both sides as to what order I should make as to costs.