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FAMV No. 179 of 2023
[2023] HKCFA 22
IN THE COURT OF FINAL APPEAL OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
MISCELLANEOUS PROCEEDINGS NO. 179 OF 2023 (CIVIL)
(ON APPLICATION FOR LEAVE TO APPEAL
FROM CACV NO. 355 OF 2021)
___________________________
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BETWEEN
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MK |
Applicant |
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(Applicant) |
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and |
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REGISTRAR OF HIGH COURT |
Respondent |
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and |
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DIRECTOR OF LEGAL AID |
Interested Party |
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(Respondent) |
___________________________
| Before: |
Mr Justice Fok PJ in Chambers |
| Date of Decision: |
1 August 2023 |
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D E C I S I O N
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Mr Justice Fok PJ:
1. On 7 July 2023, the Appeal Committee granted the applicant, MK, leave to appeal to the Court of Final Appeal in respect of a question of law relating to the proper interpretation of Regulation 21(1)(b) of the Legal Aid Regulations, Cap. 91A.[1] The respondent to the appeal is the Director of Legal Aid.
2. The order of the Appeal Committee granting the applicant conditional leave to appeal included the standard condition that the applicant should pay into court the sum of HK$400,000 by way of security for the respondent’s costs of the appeal.
3. The applicant wishes to vary that standard condition and seeks a waiver of the requirement to provide security for the respondent’s costs. Having failed to reach agreement with the respondent on a waiver of the requirement to provide security for costs, the applicant has applied by summons to a single permanent judge of the Court for an order to that effect. As provided for in the standard terms of the order granting conditional leave to appeal (see Practice Direction 2.3), the parties have filed written submissions in support of, and in opposition to, the application and it will be dealt with on the papers.
4. It is worth reiterating the “starting point” in this context, as succinctly summarised by Chief Justice Ma in Designing Hong Kong Limited v The Town Planning Board and Secretary for Justice,[2] namely: (1) an order for security for costs is a standard term in appeals to the Court of Final Appeal; (2) the purpose of the condition is to protect the respondent in an appeal from the injustice of not being able to recover costs from the appellant in the event of an unsuccessful appeal; (3) the starting point is reflected in the practice direction and in the case law of the Court; and (4) if it is sought to vary this standard term, good grounds have to be shown.
5. The applicant’s summons is supported by an affirmation made by her dated 18 July 2023. In the affirmation, the applicant addresses her grounds for seeking a waiver of the requirement to provide security for costs, namely that her impecuniosity means that without a waiver she will be forced to abandon the appeal and an appeal on an important point of law concerning legal professional privilege will therefore be stifled. The applicant deposes to the fact that she is insolvent and owes the Government over HK$3.5 million in outstanding costs and interest arising from the costs order made against her in the Court of Appeal below. She explains that she is working at a pet shop earning a monthly salary of HK$5,000 and does not own any property or valuable asset. She states that she has only one bank account maintained with the Bank of China (Hong Kong) Limited, in which, as at 10 July 2023, there is a balance of only HK$100.09. Bank statements over the past three years show that the balance in her account did not exceed HK$20,048.09. She is currently living in a village house in Lantau owned by a relative of her life partner, Madam C, who has allowed the couple to live there rent-free. The applicant states that Madam C also does not have any valuable assets and that, whilst she has two bank accounts, neither has sufficient funds to enable the applicant to fund the security for costs. She deposes to her belief that there is no prospect of her raising funds to furnish the security, stating that none of her friends or family are able to fund her in the pursuit of the appeal.
6. For the applicant, it is submitted that the evidence establishes that she is “plainly insolvent”[3] and there is no prospect of her providing the ordered security or otherwise being in a position to raise funds for that purpose. It is therefore submitted that it is not only “probable” but “a foregone conclusion” that the requirement to provide security, unless waived, would lead to the applicant having to abandon the appeal.[4]
7. The burden of establishing that the order for security would have the probable effect of stifling the appeal is on the applicant: Kwok Cheuk Kin v Director of Lands.[5] And as has been said before, applications of this nature will necessarily turn on their own facts.[6]
8. Here, the applicant’s parlous financial condition is supported by the evidence of her modest monthly salary and also her bank savings, as disclosed by the last three years’ of her account statements. Furthermore, she is facing a significant liability in the form of the taxed costs for the proceedings below, in the sum of just over HK$3.5 million.
9. However, it is to be remembered that it is for the applicant to establish, not only that she does not herself have the funds to provide the security for costs but also that she could not raise the security from third party sources including friends and relatives: M V Yorke Motors (a firm) v Edwards.[7] In this regard, she is obliged to make full and frank disclosure as to her means and also as to the possibility of funding from other sources as well.[8]
10. I agree with the respondent’s submission that the most obvious alternative funding source for the applicant would be her life partner Madam C. Yet the evidence in support of the assertion that Madam C is unable to provide financial support to the applicant is far from satisfactory. In contrast to the bank statements of the applicant, which cover a period of three years from June 2020 to June 2023, the evidence concerning Madam C’s bank account only relates to the period from 20 May 2023 to 30 June 2023. Given that Madam C owns and runs a pet shop,[9] the applicant ought to have been much more forthcoming with evidence of the financial condition of Madam C, as well as her pet shop and its accounts.
11. I also consider that there is some substance in the respondent’s submission that, given the provision of rent-free accommodation in a village house in Lantau owned by a relative of Madam C who inherited it from Madam C’s grandfather, there is evidence that Madam C’s family is one of “some financial means”.[10] Yet, instead of positive evidence that she has approached friends or relatives to ask if they would be willing to lend her funds for the litigation, it is merely assumed in her affirmation that they would not be willing to do so due to her being “practically insolvent”.[11] There is no evidence of who the applicant and Madam C’s close family and friends are and what inquiries have been made of them as regards the possibility of financial assistance in the form of a loan.
12. Moreover, although the applicant’s present counsel and solicitors are prepared to act for her in the substantive appeal to the Court of Final Appeal, and acted before the Appeal Committee on the application for leave to appeal, on a pro bono basis, there is no evidence that they acted for the applicant below on that basis. On the contrary, the applicant’s affirmation appears to confirm she remains under a liability to settle their fees.[12] That being the case, the applicant must have found some means of funding her own legal costs in the courts below. Even if she did not provide those costs on account, she must have had some form of financial plan to meet those costs in due course. If those costs were not to be met from her own resources, she must have had or anticipated financial support from some third party. Yet there is no evidence to explain how she was intending to fund her own litigation costs in the courts below.
13. I have therefore come to the conclusion that the applicant has not discharged her burden of establishing that it is probable the order requiring her to provide the standard amount of security for the respondent’s costs would stifle the appeal. As I have said, each case turns on its own particular facts. This case is not like Kwok Cheuk Kin v Director of Lands where the inference of inability to fund the security could be drawn from the fact of his having been made the subject of a bankruptcy order.[13]
14. I do not overlook the fact that the subject-matter of the appeal, which is concerned with the fundamental right to confidential legal advice protected by the Basic Law, is self-evidently of importance and, in granting the applicant leave to appeal to the Court of Final Appeal, the Appeal Committee was satisfied that the appeal met the requisite threshold of importance and reasonable arguability. However, in my view, this is a factor that does not weigh heavily in favour of the applicant’s summons because every civil appeal before the Court of Final Appeal where leave is granted on a point of law will by definition involve a question of great general or public importance. If this alone were sufficient to justify dispensing with the usual order for security for costs the starting point would not be that as set out in Designing Hong Kong Limited v The Town Planning Board and Secretary for Justice (see [4] above). Furthermore, this case is not one like Kwok Cheuk Kin v Director of Lands where the courts below had ordered that there be no costs below on the basis of the public interest litigation exception.[14]
15. For all these reasons, I dismiss the applicant’s summons seeking a waiver of the requirement to provide security in accordance with the standard order and order that the costs of the summons be paid by the applicant to the respondent.
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(Joseph Fok)
Permanent Judge
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Written Submissions by Mr Jonathan Chang SC, Ms Queenie Ng and Mr Martin Ho, instructed by Jimmie K.S. Wong & Partners (on a pro bono basis), for the Applicant (Applicant)
Written Submissions by Mr Abraham Chan SC and Mr John Cheung, instructed by the Department of Justice, for the Interested Party “Director of Legal Aid” (Respondent)
[1] FAMV 179/2023, [2023] HKCFA 17, Determination, 7 July 2023 (Fok PJ, Lam PJ and Tang NPJ).
[2] FAMV 30/2017, Decision, 20 December 2017, at [4].
[3] Skeleton Submissions for the Applicant, 18 July 2023, at [10].
[4] Ibid. at [11].
[5] (2021) 24 HKCFAR 220 at [22].
[6] Ibid. at [23].
[7] [1982] 1 WLR 444 per Lord Diplock at 449C-E and 449H.
[8] Ibid. at 449C-E; Mahan Air and others v Blue Sky One Ltd [2011] EWCA Civ 544 at [38]; Industrial and Commercial Bank of China Limited, Mumbai Branch v Anil Dhirajlal Ambani [2020] EWHC 272 (Comm) at [26].
[9] It would appear this is the pet shop where the applicant is employed: see Madam C’s affirmation in Legal Aid Appeal 583/2019 (21 May 2019). It is also to be inferred from the applicant’s assertion that she and Madam C “live and work together”: Applicant’s Affirmation, 18 July 2023, at [17]).
[10] Skeleton Submissions for the Respondent, 25 July 2023, at [11].
[11] Applicant’s Affirmation, 18 July 2023, at [19].
[12] Ibid. at [25].
[13] (2021) 24 HKCFAR 220 at [23].
[14] Ibid. at [19].
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