SMELOAN HONG KONG LTD v. WONG WING CHEUNG t/a HUNG WAN TRADING CO

CACV 431/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 431 OF 2006

(ON APPEAL FROM HCA 882 OF 2003)

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REASONS FOR DECISION

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1. These are the reasons of my decision given on 29 January 2007.

Security for costs of appeal

2. Mr. Recorder J Fok S.C. gave judgment to the plaintiff against the defendant for the sum of HK$726,652.28 together with interest.  The defendant lodged a notice of appeal against the judgment.  The appeal will be heard on 6 March 2007.

3. The plaintiff applies for security for costs of the appeal in the sum of HK$364,500.00 against the defendant.

Special circumstances

4. The Court may in special circumstances ordered an appellant to provide security for the costs of his appeal.  Impecuniosity of the appellant is one of the special circumstances.  The rationale behind ordering security is to strike a balance of the conflicting position of the parties :  on one hand the appellant is entitled to pursue his appeal; on the other hand, there should be protection for the respondent in terms of costs in the event the appeal is unsuccessful.

Impecunious appellant

5. This is a case where the defendant is impecunious, he admitted it as much in his previous affirmations and in his written submission.  This being the case the defendant has established that there are indeed special circumstances which may justify the Court imposing security. 

Merits of the appeal

6. That, however, is not the only consideration.  The Court should also consider whether there is a meritorious appeal such that security should not be imposed to stifle a genuine appeal.  The judgment against the defendant was based on a finding of fact by the judge.  I am not convinced that the defendant has such a meritorious appeal that I should not impose security in this case.

Amount of the security

7. As to the amount of the security the bulk of the sum is taken up by senior counsel’s fee of attending the appeal.  The case was handled below by Mr. Lui who succeeded despite having a senior counsel as his opponent.  I cannot see why Mr. Lui or a senior junior cannot be instructed at the appeal.  Mr. Lui explained that the estimated bill of costs was prepared in anticipation of a senior counsel representing the defendant.  As the defendant is now acting in person, he accepted that the costs should not exceed HK$150,000.00.  In my view HK$150,000.00 is an appropriate sum for the security.

Orders

8. Accordingly I ordered that this sum is to be paid into Court within 28 days.  Pending payment in the appeal is stayed.  In default of payment in the appeal is dismissed with costs to the plaintiff.  Costs of this application be in the cause of the appeal.