RAI GEHENDRA RAJ v. YICK HING CONSTRUCTION CO LTD

CACV 214/2017

[2018] HKCA 95

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 214 OF 2017

(ON APPEAL FROM HCPI NO. 48 OF 2012)

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D E C I S I O N

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Hon Cheung JA (giving Decision of the Court) :

1.  The plaintiff claimed damages against the defendant employer for personal injuries he sustained in the course of his employment. His claim was dismissed by Lisa Wong J. The plaintiff appeals. The defendant now applies for security for costs of the appeal against the plaintiff in the sum of $250,000. We will now deal with this application on paper.

2.  The Court of Appeal may in special circumstances order an appellant to lodge security for costs of his appeal.  One of the exceptional circumstances is that when the appellant is impecunious and will unlikely be able to pay for the other party’s costs of the appeal in the event he fails in the appeal.  The reason why security is to be ordered in such a situation is to ensure that the successful party would not be unable to recover its costs despite being successful.

3.  In the present case the defendant relies on the following matters to show that the plaintiff is impecunious :

1)   The plaintiff received legal aid for the conduct of his case in the court below before his legal aid certificate was discharged on 6 May 2015.  The plaintiff applied for legal aid to prosecute this appeal but was refused.

2)   The plaintiff was granted comprehensive social security assistance from the Social Welfare Department after the accident.

3)   The plaintiff claimed that he could only work after the accident as a security guard earning around $7,500 per month and there was evidence that he was employed as a security guard in August 2014 at the monthly salary of $7,440.

4)   The plaintiff lives alone in a public housing rental unit.  The current maximum income limit and total net asset limit for a one‑person family to live in a public housing rental unit are $11,250 and $245,000 respectively.

5)   It appears that the plaintiff does not own any property in Hong Kong.

4.  The plaintiff has not filed any evidence in response to the defendant’s allegation of his impecuniosity.  We are satisfied, based on the matters relied upon by the defendant, that the plaintiff is, indeed, impecunious and would unlikely be able to pay for the costs of the defendant’s appeal in the event that he fails in the appeal.

5.  Even where an appellant is shown to be impecunious, the Court still has a discretion not to order security where the appellant is able to show that he has a high prospect of success in the appeal.

6.  In the present action the Judge rejected the plaintiff’s case as to how the accident occurred. She further rejected his case that the defendant was his employer.  Since the defendant was not the plaintiff’s employer, it could not have been in breach of the contract of employment.  In any event the Judge held that even if the defendant was the principal contractor, it owned no tortious duty of care towards the plaintiff.  The Judge further held that the defendant was not in breach of any statutory duty towards the plaintiff.  

7.  In relation to the issue of quantum, the Judge held that in the event that the defendant was liable, her award for the plaintiff’s claim for damages would be substantially lower than what the plaintiff himself had claimed.

8.  In our view the Judge’s rejection of the plaintiff’s claim on liability was based on findings of fact.  It has not been shown that the plaintiff has a high prospect of success in overturning the Judge’s decision.  In the circumstances we will impose security. 

9.  The amount of $250,000 claimed by the defendant includes counsel’s fees of $50,000 for the preparation and attendance of the application for security of costs and counsel’s fee for the preparation and attendance of the hearing of the appeal at $150,000.

10.  As we are dealing with this application on paper, the costs relating to attendance of the application in Court will not be necessary.  This is a simple case, in our view, the appropriate amount is $120,000 which includes $12,000 as solicitors’ costs for the application for security.  Accordingly, we will make the following orders :

1)   the plaintiff is required to pay into court $120,000 as security for the costs of his appeal within 42 days;

2)   pending payment into court, the appeal is stayed;

3)   in default of payment, the appeal will be dismissed without further order together with the costs of the appeal; and

4)   the defendant to have the costs of the application for security which are summarily assessed at $12,000.

11.  We would like to remind practitioners once again of the requirement to Practice Direction 14.3 paragraph 10 that a receiving party cannot recover a sum in excess of his liability to his own solicitor applies equally to gross sum assessment and the solicitor for the party seeking costs shall certify on the statement of costs as follows :

‘ I certify that the amount claimed in this statement of costs does not exceed [the plaintiff’s/the defendant’s] liability for costs to my firm in respect of this [summons/hearing/action, etc.]’

12.  Regrettably, the certification is missing in this case and the defendant’s solicitors are required to provide the certificate to Court within seven days.