LEE CHEE HO, JULEUS (aka LEE, JULEUS) v. SHE LIANZHEN, THE SOLE EXECUTRIX OF THE ESTATE OF 王秉歧, DECEASED

CACV 237/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 237 OF 2016

(ON APPEAL FROM HCSD NO 33 OF 2016)

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D E C I S I O N

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Hon Poon JA (giving the Decision of the Court) :

INTRODUCTION

1.  On 28 January 2014, the respondent obtained judgment from Deputy High Court Judge B Chu (as she then was) against the appellant in HCA 186/2010 with costs.  By an allocatur dated 14 January 2016, the master assessed the respondent’s costs at HK$1,303,208.00.  The appellant did not pay up.  The respondent then tried to enforce the costs order through garnishee proceedings.  At the hearing before the master on 6 April 2016, the respondent obtained a garnishee order absolute when the solicitors acting for the appellant did not oppose the application.  However, it later transpired that the net balance of the account maintained by the appellant at the garnishee bank was HK$1,513.13 only.

2.  The respondent then served on the appellant a statutory demand dated 1 June 2016 for the outstanding costs.  The appellant applied to set it aside on the ground that he allegedly had a cross claim against the respondent.  By a judgment date 16 November 2016, Ng J dismissed the appellant’s application with costs.  By a notice of appeal dated 14 December 2016, the appellant sought to appeal against Ng J’s order.

3.  By a summons dated 19 January 2017, the respondent applied for security for costs of the appeal in the sum of HK$375,000.00. The appellant opposed the application.  Having considered the parties’ submissions, we take the view that the matter can be disposed of on paper without an oral hearing.  We now hand down our judgment.

BACKGROUND

4.  We respectfully adopt the summary of the background by Ng J in his judgment.

DISCUSSION

5.  Under Order 59, rule 10(5) of the Rules of the High Court, Cap 4A, the Court of Appeal may, in special circumstances, order that such security shall be given for the costs of an appeal as may be just.  The applicable principles for the court’s exercise of the power in ordering security for the costs of an appeal are well settled : see Chung Kau v Hong Kong Housing Authority [2004] 2 HKLRD 650, per Ma CJHC (as the Chief Justice then was) at [14].  We shall not repeat them here.

6.  We first consider if the appellant is impecunious or there exists difficulty in enforcing a costs order against him. On the evidence before us, we are satisfied that the appellant is either impecunious or the respondent would face real difficulty in enforcing a costs order against him should the appeal fail.

7.  The costs ordered against the appellant by Deputy High Court Judge B Chu has been outstanding for more than a year.  The respondent’s solicitors have been unable to identify any asset held by the appellant in Hong Kong, other than the small sum of HK$1,500 odd standing in his account, which is of course quite meaningless in terms of payment of the outstanding costs or any future costs order.

8.  The appellant has not disclosed any assets in his affirmation filed in opposition to the present application.  He said, without exhibiting any documentary evidence in support, that he is a certified public accountant and has been in full time practice since 1972 and that he has no substantial liabilities.  Even taking what he said at its face value, it does not detract from the position that, on the available evidence, he does not have any assets to pay the outstanding costs or meet any future costs order.

9.  If contrary to what appears from the evidence, the appellant does have assets to meet a costs order, he has chosen not to produce the necessary evidence.  His conduct only reinforces the respondent’s case that it would be difficult to enforce a costs order against him should his appeal fail.

10.  The appellant said he can deposit a sum of HK$180,000.00 with his solicitors who shall undertake to pay the respondent’s costs should his appeal fail.  The appellant has however failed to show, with any evidence, that he has the financial means to do so.

11.  We next consider if there is any countervailing factor which would militate against the ordering of security of costs against the appellant.  The only point taken by the parties in this respect concerns the merits of the appeal.  Mr Ho, counsel for the respondent, submitted the grounds of appeal are no more than a rehearsal of the arguments rejected by Ng J.  They are wholly unmeritorious.  The solicitors acting for the appellant argued that the respondent has not submitted that the appeal is an abuse of process and that even if that were the respondent’s submission, the mere fact that the grounds of appeal are weak does not constitute an abuse of process.

12.  We have considered the reasons why Ng J dismissed the appellant’s application to set aside the statutory demand.  Since the Court will hear the appeal in due course, we only need to briefly indicate our preliminary view on its merits for the purpose of disposing of the present application.  As the matter now stands before us, we think the appeal is a rather weak one.  It certainly does not militate against the ordering of security for costs of the appeal against the appellant.

13.  On quantum, we have considered the skeleton bill of costs submitted by the respondent’s solicitors.  On the materials now before us, we do not think the respondent needs to engage two counsel to argue the appeal.  A senior junior would suffice.  Taking a global view, we think a sum of HK$200,000.00 as security for the costs of the appeal is reasonable.

ORDERS

14.  In the circumstances, we allow the respondent’s application and make the following orders :

(1) The appellant shall within 28 days from the date of this order give security for the respondent’s costs of this appeal in the sum of HK$200,000, by making payment into court of the said sum;

(2) Until the appellant has given the security ordered in (1) above and notice thereof is given to the solicitors for the respondent (such notice to be given on the same day as the lodgement is made), all proceedings in this appeal are to be stayed;

(3) In default of the appellant giving security as order in (1) above, this appeal do (upon the solicitors for the respondent certifying such default to the Registrar of High Court) stand dismissed out of this court without further order;

(4) In the event that the appeal is dismissed in the circumstances provided for in (3) above, the appellant shall pay the respondent the costs of this appeal, such costs to be taxed if not agreed; and

(5) The costs of the respondent’s application for security for costs be paid by the appellant in any event.