LIU ZHI YE v. LAM KIT PING, KITTY AND ANOTHER

HCA 2206/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2206 OF 2009

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BETWEEN

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DETERMINATION

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Introduction

1.  This is the 1^st and 2^nd Defendants’ application for security for costs against the Plaintiff. A sum of HK$355,630 is sought under Order 23 rule 1 of the Rules of the High Court.

2.  As to background, the Plaintiff’s suit against the Defendants is founded in tort. Shortly stated, the Plaintiff alleges that the Defendants were negligent in failing to exercise skill and care in their advice to him over the setting up of an acupuncture practice in Hong Kong and on matters of permit and registration requirements. Acting upon such advice the Plaintiff set up and operated an acupuncture therapy centre on Kowloon until the business was abruptly halted by his arrest and charge for practising as a Chinese medical practitioner without registration and for breach of condition of stay. The Defendants have denied rendering such advice effectively refuting all allegations of negligence.

The Application

3.  There can really be no controversy that the Plaintiff is ordinarily resident without the jurisdiction. In his affirmation in opposition, his residential address is stated as Room 1002, Tower 13, Fu Ji Nan Er Jie, Nan Hua Dong Lu, Guangzhou in the PRC. It would seem that the Plaintiff is currently living and working in China although he has deposed to the fact that he is gainfully employed by Long Spark Limited, a shelf company whose shareholders and directors are the Plaintiff and a certain Xing Su. Little else is known about this employment as no supporting documents regarding the terms of the employment have been adduced. There is however evidence that the Plaintiff holds an Employment (Investment) Visa issued by the Hong Kong Immigration Department and renewable on 10 August 2010.

4.  Long Spark Limited operates an account with Hang Seng Bank with a minimum balance requirement of HK$50,000. Again, the state of the account has not been revealed. In any event, it is incorrect for the Plaintiff to point to this account as his asset within the jurisdiction. It is plainly Long Spark Limited’s asset.

5.  On the evidence, it seems reasonably clear that the Plaintiff not only does not reside here, he also possesses no asset within the jurisdiction. He is domiciled in Canada and now chooses to live in the PRC.

The Applicable Principles

6.  The court is vested with a wide discretion on applications for security for costs against foreign litigants. There is no inflexible rule that a foreign plaintiff must offer security. The court must have regard to all the circumstances of the case and will order security where it is just to do so: (see Mark Clinton Sharp v Wong Chi Lik Steven & anr, October 23, 2009 HCA No. 2215 of 2009; PT Graha Multimulia Cemerlang v Silver Tech Enterprises Ltd HCCW No. 883 of 2004, unreported, 1 March 2005; and Tsang Yee Mui v The Personal Representatives of Mak Chik Wing, the Deceased and Another, HCA No. 2606 of 2006).

7.  The probable difficulty of the Defendants in enforcing any successful costs order against the Plaintiff in Canada is a matter to which the court may have legitimate regard as are the additional dimensions of time and expense: Izumo Mokko Co. Ltd v TS Lines Limited [2007] 2 HKLRD 363; Yang Wei Jennifer & Another v HSBC Private Trustee (Hong Kong) Ltd, HCA No. 5073 of 2001 and HCAP No. 11 of 2002).

8.  Where the claim of a plaintiff is bona fide and strong with likelihood of success, the court’s discretion may favour him and refuse security. In the instant case, it cannot be said on the papers and pleadings that the Plaintiff’s claim can be so labelled. The circumstances of the parties’ meeting in the run up to the establishment of the acupuncture business and what was said and by whom, whether advice of the kind now alleged has been given by the Defendants are all matters of substantial dispute. Such controversy can only be resolved at trial. Much would depend upon the tribunal’s view on credibility. One needs say no more.

9.  Having considered the evidence and the parties’ written submissions and applying the principles which have hitherto been set out, I consider that on balance it would be just to make an order for security against the Plaintiff. I do not find on the evidence that such an order would stifle the Plaintiff’s claim.

10.  On the question of quantum, I do agree with the Plaintiff’s submission that the amount sought is excessive. The schedule of costs is annexed to the affidavit of Tang Shu Pui Simon.

11.  The quantum of security must be just to the parties in all the circumstances. So what would be a fair and sufficient security in the circumstances?

12.  In my judgment a sum of $250,000 would meet the justice of the case. That is the amount I shall order the Plaintiff to pay into court within 21 days from the date of this order. In the interim, the suit shall be stayed.

13.  As to costs, the Plaintiff shall pay the Defendants their costs of the application including any costs reserved in respect thereof, which costs I shall fix at $36,000. These costs are to be paid within 14 days hereof.