RICH FINE (HK) INVESTMENT LTD AND ANOTHER v. LEUNG YIU CHUEN

CACV 259/2018

[2018] HKCA 965

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 259 OF 2018

(ON APPEAL FROM HCA 1243/2012)

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JUDGMENT

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Hon Lam VP (giving the Judgment of the Court):

1.  By a judgment of 25 May 2018, M Chan J granted relief to the Plaintiff and ordered the Defendant to deliver vacant possession of several properties, to pay mesne profits and damages and costs to the Plaintiff. The Defendant brought an appeal against that judgment by a notice of appeal of 22 June 2018.

2.  On 23 August 2018, the Plaintiff applied by a summons to seek security for costs in respect of the appeal.

3.  In the summons, the amount of security sought is $936,000.  The breakdown of that figure appears in an estimate exhibited as “LK-2” to the affirmation of the solicitors for the Plaintiff of 23 August 2018. 

4.  In the meantime, the Defendant applied for legal aid and the processing of the summons was stayed for 42 days.

5.  After legal aid had been refused on 21 August 2018, counsel for the parties lodged their respective submissions on the summons.

6.  Having read the submissions, we are of the view that this summons can be determined on the papers without any oral hearing.

7.  Counsel for the Defendant did not contest the requirement of the Defendant to pay security in this appeal.  Having regard to the evidence on the impecuniosity of the Defendant and the merits of the appeal, we are of the view that this is a proper stance.  We are satisfied that in accordance with the approach set out in Chung Kau v Hong Kong Housing Authority [2004] 2 HKLRD 650, this is a proper case for security to be granted.

8.  The only issue that we have to decide is the amount of security.  The Defendant contends that the amount sought by the Plaintiff is unreasonable and it is unnecessary to engage senior counsel for the appeal.

9.  In the costs estimate, the fee of the senior counsel is $400,000 and the fee of the junior counsel is $265,000. 

10.  At the trial before the judge, the Plaintiff was represented by the same junior counsel, who is a very experienced counsel.

11.  The Defendant was also represented by junior counsel.  The counsel who represented the Defendant in respect of this application is also a junior counsel. 

12.  Having regard to the complexity of the appeal, we agree with the Defendant.  In the exercise of this court’s power in ordering security for costs, the underlying objectives in Order 1A Rule 1 is relevant. In particular, Rule 1(c) and (d) (highlighting proportionality in conduct of proceedings and fairness between the parties) have to be borne in mind.  

13.  In our judgment, the appropriate amount of security for this appeal is $400,000 and we will give the Defendant 42 days to pay such security into court.

14.  The summons of 23 August 2018 did not set out the correct form of order to be made upon security to be granted. 

15.  We order as follows:

(1)   Unless the Defendant pay into court the sum of $400,000 within 42 days from the handing down of this decision as security for costs of this appeal, the appeal shall be dismissed without further order.  Upon such dismissal, the Defendant shall pay the Plaintiff the costs of this appeal, such costs are to be taxed if not agreed.

(2)   In the meantime, the appeal shall be stayed until the payment of the security as ordered under (1) above. 

16.  In respect of the costs of this application, the Defendant belatedly through his counsel indicated in the submissions of 15 October 2018 that he would only dispute the quantum.  Though he was successful in that challenge, bearing in mind the timing of such concession, we think a fair order to be made on costs is that the Plaintiff’s costs of the summons be costs i the cause of the appeal.