NG YAT CHI AND ANOTHER v. CHINA RESOURCES (HOLDINGS) CO LTD AND OTHERS

CACV 263/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 263 OF 2005

(ON APPEAL FROM hca nO. 424 OF 2005)

_______________________

______________________ 

_________________________

REASONS FOR JUDGMENT

_________________________

1.  On 9 November 2005, I granted leave to Securities and Futures Commission (‘SFC’) to amend its summons to increase the amount of security for costs sought to $230,000 with no order as to costs on that summons. I then granted SFC’s application for security of costs of the appeal against the plaintiffs – Ng Yat Chi and Choy Bing Wing in their absence as both of them chose not to appear. I indicated that I would hand down my reasons and this I now do.

2.  On 12 August 2005, A Cheung J (the judge) struck out Mr Ng and Mr Choy’s statement of claim against SFC with costs on an indemnity basis.

3.  The judge took the view that their claims were covered by the restricted proceedings order against Mr Ng of the Court of Final Appeal in FACV 5 0f 2004, an appeal from HCCW No 321 of 1996, HCA No 2039 of 2002 and HCSD No 22 of 2002 (‘the proceedings’).

4.  The judge refused to grant Mr Ng permission to continue with his claim and issued a further restricted proceedings order against him to cover any proceeding that Mr Ng might wish to commence whether as the sole plaintiff or as a co-plaintiff in connection with the proceedings.

5.  The judge also made a similar restricted proceedings order against Mr Choy.

6.  On 25 August 2005, Mr Ng and Mr Choy filed their notice of appeal, seeking to set aside the judge’s order.

7.  On 23 September 2005, SFC applied for an order for security of costs of the appeal in the sum of $150,000, which sum was subsequently increased to about $230,000.

8.  SFC had set out the history of the proceedings, in particular the difficulties involved in pursuing previous costs orders against Mr Ng and Mr Choy in other related proceedings, and contended that SFC would incur additional costs and suffer delay in trying to enforce any costs order against them.

9.  SFC further suggested that Mr Ng and Mr Choy’s claims against SFC were unsustainable and their grounds of appeal were not capable of reasoned argument, and therefore constituted an abuse of the process of the court.

10.  Order 59 rule 10(5) of the Rules of the High Court empowers the Court of Appeal to order, in special circumstances, the security for costs of the appeal and one of such recognized special circumstances is “where the respondent will be likely to encounter undue delay or be put to undue expense in enforcing any order for the costs in respect of the appeal”.

11.  The previous conducts of Mr Ng and Mr Choy in other related proceedings clearly indicate that they are likely to resist enforcement of any costs order. There was no indication that they sought to argue otherwise. They had been given chances to file evidence to challenge SFC’s contention and they chose not to.

12.  I find it unnecessary to set out the history of Mr Ng and Mr Choy’s complains as the judgment of the Court of Final Appeal in FACV 5 0f 2004 has spoken loudly and clearly.

13.  Mr Ng and Mr Choy’s claim against SFC is an abuse. It is likely that SFC will encounter undue delay or be put to undue expense in enforcing any costs order against them or either of them.

14.  I considered it proper to exercise my discretion to order Mr Ng and Mr Choy to furnish security for costs of the appeal and the requested amount by SFC of $230,000 is a reasonable sum.

15.  I therefore made the following orders:

(1)     Mr Ng and Mr Choy have to pay into court the sum of $230,000  within 21 days as security for SFC’s costs of the appeal;

(2)     Until the payment into court of the security of costs, their appeal will be stayed;

(3)     If Mr Ng and Mr Choy fail to provide the security of costs , their appeal will be dismissed forthwith with costs to SFC to be taxed on an indemnity basis; and

(4)     If the order for security of costs is complied with, the costs of  this application will in the cause of the appeal.