CACV 21/2014
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
CIVIL APPEAL NO. 21 OF 2014
(ON APPEAL FROM HCAP NO. 2 OF 2012)
________________________
| | IN THE ESTATE OF SIN HING, late of Room 312, Man Lok House, Tai Hang Sai Estate, Shek Kip Mei, Kowloon, Hong Kong, Widow, Deceased |
________________________
BETWEEN
| | CHAN WAN YEE (陳韻怡) | Plaintiff |
| | and | |
| | CHAN TO FUN (陳道奮) | Defendant |
________________________
| Before: Hon Kwan JA in Chambers |
| Date of Hearing: 3 October 2014 |
| Date of Decision: 3 October 2014 |
________________________
D E C I S I O N
________________________
1. This is an application for security for costs on appeal brought by the plaintiff. The defendant acts in person. He has filed an affidavit opposing the application on 28 August 2014 and lodged a submission on 25 September 2014.
2. In short, the plaintiff applied for security on the grounds that the defendant is impecunious and that the grounds of appeal are untenable and so the appeal is an abuse of process or is vexatious.
3. The defendant opposed the application on a variety of grounds. He contended that impecuniosity is not a ground for ordering security; that no security for costs may be ordered against a defendant; that the court retains a discretion not to order security and would decline to do so where it would be unjust, oppressive or would stifle a meritorious appeal; that his appeal is meritorious for a number of reasons; and that he has reported to the police “suspicious criminal acts of fraudulent will, champerty, and secret and fraudulent conveyance” against the plaintiff[1] on 4 June 2014.
4. The judgment under appeal is in a probate action and was given by L Chan J on 10 January 2014. The judge declared that the new will of Madam Sin Hing, deceased, executed on 15 October 2005 (“the new will”) is valid and was validly executed by the deceased, he ordered that various errors in the new will be rectified, and he ordered the pronouncement of the new will in solemn form and that grant of probate of the estate of the deceased be made to the plaintiff. The defendant was ordered to pay the plaintiff’s costs.
5. On 28 March 2014, the judge refused to grant an interim stay of his judgment pending the hearing of the defendant’s application for stay pending appeal. On 31 July 2014, the judge dismissed the defendant’s application for stay pending appeal on the ground of lack of merit in the appeal and that the judge did not see “any real possibility of success” in the appeal.
6. The applicable principles for ordering security for costs on appeal under Order 59 rule 10 of the Rules of the High Court are well established. The defendant’s reliance on the principles which govern an application for security for costs under Order 23 is misplaced. Security for costs may not be awarded in the court below on the ground of a defendant’s impecuniosity, but in respect of security for costs on appeal, impecuniosity of the appellant is clearly a ground for awarding security, regardless of whether he was the plaintiff or the defendant below, as the principles governing the exercise of discretion at this stage are wider and the court does take into account the fact that the appellant has already had the issue concerned determined in the court below and it is prima facie an injustice to a respondent to allow an appeal to the Court of Appeal to proceed without security being furnished in circumstances where the respondent will be unable to enforce against the appellant any order for costs made by the Court of Appeal (Hong Kong Civil Procedure 2014, vol 1, §59/10/25).
7. The plaintiff alleged that the defendant is impecunious. She relied on the statement in the defendant’s affidavit of 10 February 2014 that he applied for legal aid to prosecute his appeal and that he has been on social welfare since 26 December 2013. She has also pointed out that in respect of the proceedings below, the defendant had made two applications for legal aid in 2013, without success. On 10 February 2014, the plaintiff’s solicitors wrote to the defendant seeking security for costs on appeal of $196,300. The defendant did not respond to this letter. The present summons was issued on 12 March 2014.
8. In the defendant’s affidavit in opposition and his submission, he has not mentioned any means or assets he could make use of to satisfy any costs order that might be made against him on appeal. He alleged that the plaintiff sought to make use of his “temporary impecuniosity” to make this application to prevent him from exercising his right to bring this appeal. In his oral submissions today, he admitted that he is temporarily impecunious because of the failure of his business in China one and a half years ago but asserted he is doing his best to work towards a recovery of his financial situation.
9. I am satisfied that the plaintiff has made out “special circumstances” under Order 59 rule 10(5) for security to be ordered on appeal, as it is likely that she would be put to undue delay or expense in enforcing any order for costs in her favour in this appeal in view of the defendant’s impecuniosity.
10. According to established principles, once impecuniosity of the appellant has been demonstrated, it is up to the party resisting the application to show countervailing factors militating against an order for security, such as the merits of the appeal. For present purpose, the court is not required to undertake a detailed examination of the merits, a preliminary view would suffice. Where the merits appear to go strongly one way or the other, this may, by itself, be a decisive factor. An appeal which is very strong would be a good reason not to order security. Conversely, a hopeless appeal may by itself justify an order for security. And if the court takes the view that the appeal could go either way, generally it will look to the existence of any other factors to tilt the balance, in the absence of which security will be ordered (Chung Kau v Hong Kong Housing Authority & Ors [2004] 2 HKLRD 650 at 656, §14).
11. Applying the above principles, this is clearly a case to order security for costs on appeal.
12. I have considered the judgment of L Chan J, the grounds of appeal in the Notice of Appeal, the contentions advanced by the defendant in support of the appeal in his affidavit of 28 August 2014 and his submissions both written and oral for the present application. On a tentative basis, the grounds of appeal are plainly not strong. Even if I should form the provisional view that the appeal could go either way, there are no countervailing factors to tilt the balance and so security should be ordered. But I go further. I am of the preliminary view that this appeal is wholly without merit, and that in itself justifies an order for security.
13. In his judgment, the judge has set out the repeated attempts made by the defendant to adjourn the trial. The defendant entered an appearance to the plaintiff’s warning to caveator stating that the new will was invalid but did not give any ground thereof. He did not file any defence or witness statement in opposition in the probate action despite the opportunities given to him[2]. At the trial, in view of Order 76 rule 9, the judge did not allow the defendant to adduce any fact not already mentioned in the plaintiff’s affirmations or to give evidence but merely allowed him to cross-examine the plaintiff’s witnesses on their affirmations to ensure that the plaintiff will prove her case according to law.
14. The judge made factual findings on the evidence before him. He found the plaintiff’s witnesses – the solicitor’s clerk who prepared the new will, the solicitor who attended to the execution of the new will, and the plaintiff – all truthful witnesses and accepted their evidence[3].
15. The judge considered the defendant’s submissions but did not find his criticisms of the evidence of the plaintiff’s witnesses to be of any substance. He found that the new will was made by the deceased and declared the new will a valid will despite the clerical errors which should be rectified[4].
16. The grounds of appeal sought to repeat the submissions made before the judge and were rejected by him. It does not appear to me at the moment that the alleged fraudulent conveyance of a property of the deceased in 1999 or the failure of the plaintiff to adduce the original of the old will executed on 28 April 2003 is of any relevance, given the limited extent the defendant was allowed to take part in the probate action. Nor has the defendant advanced any valid basis for the appeal court to interfere with any of the findings of fact of the judge.
17. I have considered the skeleton bill of the plaintiff’s solicitors. The estimated costs of the appeal for which security should be provided are adjusted to $133,300, made up of the costs of this application estimated at $19,000 and the costs of the appeal at $114,300 (by reducing the charges of the partner to 15 hours’ work and counsel’s fees to $50,000).
18. I make the following orders:
(1) the defendant do within 56 days hereof give security for the plaintiff’s costs of the appeal in CACV 21/2014 in the sum of $133,300 by making lodgement in court of the said sum by cash or bankers draft, and until such lodgement be made and notice thereof given to the Registrar and to the solicitors for the plaintiff (such notice to be given on the same day as the lodgement is made) all proceedings in the said appeal are to be stayed;
(2) in default of the defendant making such lodgement as aforesaid within the time specified, or within such further time as the court may for special reasons allow, the said appeal do (upon the solicitors for the plaintiff certifying such default to the Registrar) stand dismissed out of this court without further order;
(3) in the event that the appeal is dismissed in the circumstances provided for above, the defendant do pay to the plaintiff her costs occasioned by the said appeal, such costs to be taxed if not agreed; and
(4) the defendant do pay to the plaintiff her costs of this application in any event.
| | (Susan Kwan) |
| | Justice of Appeal |
Mr Edward M H Chan, instructed by Lee & Chow, for the plaintiff (respondent)
The defendant (appellant) appeared in person
[1] Mentioned also in the decision of L Chan J on 31 July 2014, §26
[2] Judgment, §§20 to 23
[3] Judgment, §§25 to 57
[4] Judgment, §§58 to 69