RE LAU KAM SING DICKIE

CACV 330/2019, [2024] HKCA 312

On appeal from [2019] HKCFI 1855

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 330 OF 2019

(ON APPEAL FROM HCB NO 2311 OF 2019)

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J U D G M E N T

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

1.  On 19 July 2023, the Court of Appeal (Kwan VP, Yuen JA and Au JA) dismissed the debtor’s application for leave to appeal to the Court of Final Appeal (“CA Leave Judgment”)[1] against the judgment of the Court of Appeal handed down on 4 April 2023 (“CA Judgment”)[2] dismissing the debtor’s appeal against the bankruptcy order made by Au‑Yeung J dated 24 June 2019 (“Bankruptcy Order”)[3]. In the CA Leave Judgment, the Court of Appeal also ordered the debtor to pay the petitioner’s costs summarily assessed at $80,910.

2.  On 13 December 2023, the petitioner filed a summons together with a supporting affirmation for leave to withdraw $80,910 from the amounts paid into court by the debtor as security for costs of the debtor’s appeal against the Bankruptcy Order. The petitioner further sought costs of this application, which are also to be withdrawn from the security for costs paid into court by the debtor.

3.  The summons is opposed by the debtor. On 19 January 2024, the debtor filed an affirmation in opposition to this application.

4.  Having considered the papers, we think it is appropriate to determine the present summons on the basis of the existing materials without an oral hearing and proceed to do so.

Background

5.  The background matters have been set out in detail in the CA Judgment at §§2 to 15. We do not propose to set them all out. For present purpose, a brief account will suffice.

6.  The debtor failed to repay a loan of $8 million, with interest to be accrued at 2% per month, advanced by the petitioner to the debtor pursuant to a loan agreement between the parties. The petitioner served on the debtor personally a statutory demand for repayment of the loan principal of $8 million and the interest accrued in the sum of $704,000. Subsequently, the petitioner commenced a bankruptcy petition against the debtor based on the statutory demand.

7.  Two days before the hearing before the bankruptcy master, the debtor filed a notice to oppose the petition stating that he intended to contend that the petitioner is a money lender without licence. The petition was later heard before Au-Yeung J, sitting as a bankruptcy judge. The debtor did not file any evidence prior to the hearing before Au-Yeung J, but sought an adjournment of one week to file an affirmation in opposition. Au-Yeung J refused to adjourn the hearing and made the Bankruptcy Order on 24 June 2019.

8.  On 19 July 2019, the debtor lodged an appeal against the Bankruptcy Order. Upon the petitioner’s application for security for costs and pursuant to the order made on 8 June 2020[4], the debtor paid $200,000 into court as the security for costs of his appeal on 6 July 2020.

9.  On 13 August 2021, the Court of Appeal (Kwan VP and Yuen JA) dismissed the debtor’s application for leave to adduce further evidence in his appeal against the Bankruptcy Order and ordered the debtor to pay $122,780 as the petitioner’s costs of the application for leave to adduce further evidence[5].

10.  On 9 September 2021, the debtor filed a notice of motion for leave to appeal to the Court of Final Appeal against the judgment of 13 August 2021. On 12 November 2021, the petitioner made two applications, one for leave to withdraw $122,780 from the debtor’s payment into court as security for costs, and the other for further security for costs of the debtor’s appeal.

11.  On 8 July 2022, the Court of Appeal dismissed the debtor’s application for leave to appeal to the Court of Final Appeal against the judgment of 13 August 2021 with costs to the petitioner[6].

12.  In that judgment, the Court of Appeal also allowed the two applications of the petitioner. On 10 August 2022 and pursuant to the leave granted by the Court of Appeal, the petitioner withdrew $122,780 from the security for costs paid into court by the debtor to satisfy the petitioner’s costs awarded under the judgment of 13 August 2021. On 17 August 2022, the debtor paid $160,000 into court as further security for costs of the debtor’s appeal as ordered.

13.  As earlier mentioned, by the CA Judgment, the Court of Appeal dismissed the debtor’s appeal against the Bankruptcy Order with costs to the petitioner summarily assessed at $88,094, and further granted the petitioner leave to withdraw from the amounts paid into court by the debtor as security for costs. Accordingly and on 2 May 2023, the petitioner withdrew $88,094 from the security for costs paid by the debtor into court to satisfy the petitioner’s costs under the CA Judgment.

14.  On 2 May 2023, the debtor filed another notice of motion for leave to appeal to the Court of Final Appeal, this time against the CA Judgment, which was dismissed by the Court of Appeal in the CA Leave Judgment. In the CA Leave Judgment, the petitioner was awarded costs summarily assessed at $80,910.

The application for leave to withdraw sum from the security for costs

15.  On 13 December 2023, the petitioner took out the present summons against the debtor which was also issued to the Official Receiver and the joint and several trustees of the estate of the debtor. On the materials before this court, the Official Receiver and the trustees have not made any objection to this application.

16.  In the petitioner’s affirmation in support, he deposed that his solicitors had written to the debtor to demand for payment to satisfy the costs of $80,910 awarded, but the debtor did not give any reply or consent to the withdrawal of such sum from the debtor’s payment into court. The costs awarded under the CA Leave Judgment have remained unsettled. From the correspondence between the petitioner’s solicitors and the High Court Accounts Office produced by the petitioner, it was confirmed that the balance plus interest accrued held in court from the debtor’s payment into court as security for costs was $161,200 as at 21 November 2023.

17.  The debtor filed his affirmation filed on 19 January 2024 to oppose the summons. In it, he repeated his contentions raised in his substantive appeal against the Bankruptcy Order that the bankruptcy petition against him should be struck out for abuse of process on the basis that the petitioner had engaged in moneylending activities illegally without a licence. These contentions have been fully canvassed before the Court of Appeal and rejected for the reasons set out in the CA Judgment at §§27 to 31 and the CA Leave Judgment at §§5 and 6. This ground of opposition of the present summons must fail.

18.  The debtor also deposed in his affirmation that as his applications for leave to appeal to the Court of Final Appeal against the judgment of 8 July 2022 and against the CA Judgment are both being considered by the Appeal Committee of the Court of Final Appeal, leave to withdraw $80,910 from the payment he made into court should be refused. There has been no stay of execution of the costs order awarded under the CA Leave Judgment. The pending applications of the debtor before the Appeal Committee of the Court of Final Appeal are not relevant.

19.  Since the debtor’s application for leave to appeal to the Court of Final Appeal has been dismissed and the debtor has failed to pay the petitioner’s costs awarded under the CA Leave Judgment, the petitioner is entitled to withdraw such sum from the security for costs paid into court by the debtor to satisfy the costs awarded of $80,910.

Conclusion and costs

20.  For the above reasons, we grant leave to the petitioner to withdraw $80,910 from the amounts paid by the debtor into court as security for costs of his appeal as sought in the present summons.

21.  Costs of the present summons should follow the event. Having considered the petitioner’s statement of costs for summary assessment, we reduce the reasonable costs recoverable from $29,250 to $17,650. We also give leave to the petitioner to withdraw $17,650 from the amounts paid into court by the debtor as security for costs to meet the costs of this application awarded against the debtor.