SUCCESS TOP (ASIA) LTD v. SZE KIN YU

DCCJ 1858/2022

[2024] HKDC 530

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1858 OF 2022

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BETWEEN

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DECISION

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1.  There are two summonses before this court today.

2.  On 18 October 2023, I dismissed the plaintiff’s appeal against Master Matthew Ho’s decision with a costs order nisi, requiring the plaintiff to pay the defendant the costs of the appeal, with a certificate for counsel, and such costs to be taxed if not agreed (“the Decision”, published under neutral citation [2023] HKDC 1451).

3.  Now, the 1^st summons is that the defendant applies to vary the costs order nisi from taxation to summary assessment. The 2^nd summons is that the plaintiff applies for leave to appeal to the Court of Appeal against the Decision.

1^st Summons - Variation of costs order nisi

4.  The issue before the court is whether the court should vary the costs order nisi from taxed costs to summary assessment.

5.  By a solicitors’ letter dated 24 October 2023, the defendant applied to vary the costs order nisi for summary assessment. Upon the plaintiff’s objection and this court’s direction, the defendant filed a summons dated 11 December 2023 seeking for serving the Summons out of time and a variation order to vary the costs order nisi to “the plaintiff shall pay the defendant the costs of the appeal with certificate for counsel to be summarily assessed and payable forthwith.”

6.  The defendant relies on the following provisions.

7.  Order 62 rule 9A provides:

“(1) Where the Court has determined an interlocutory application at any stage of proceedings and orders a party to pay costs in respect of the interlocutory application to any other party, it may, if it considers it appropriate to do so but subject to rule 9C —

(a) make a summary assessment of the costs by ordering payment of a sum of money to that other party in lieu of taxed costs;

(b) make a summary assessment of the costs by ordering payment of a sum of money to that other party in lieu of taxed costs but subject to the right of either party to have the costs taxed pursuant to paragraph (2); or

(c) order that the costs be taxed in accordance with this Order.”

8.  Practice Direction 14.3 provides:

“6. Upon the disposal of any application, cause or matter, the Court may make one of the following orders in respect of the costs of and incidental thereto:

(1) summary assessment of such costs, in which event Part C(1) below applies;

(2) provisional summary assessment of such costs; or

(3) taxation of such costs, in which event Part C(2) below applies.

The Court will give preference to the first two options where an interlocutory application is concerned, unless there is good reason not to do so, e.g. where the paying party shows substantial grounds for disputing the sum claimed for costs that cannot be dealt with summarily.”

9.  Mr Siu, counsel appearing for the defendant, confirms that the defendant did not request a summary assessment at the last hearing. However, he contends that the plaintiff’s appeal against Master Matthew Ho’s decision is a stand-alone application. The activities relating to that application are readily identifiable. The costs relating to that application are self-contained. Mr Siu therefore submits that it is appropriate to vary the costs order nisi to provide for summary assessment. Reliance is placed on Hornor Resources (International) Co Ltd v Savvy Resources Ltd, unreported, HCA 335/2010, 21 April 2010, per Chu J (as she then was):

“6. … The activities relating to the applications and that are relevant to inter-partes costs should be readily identifiable. Further, as the proceedings in the action (other than those relating to the injunction) have been stayed pending arbitration, the costs in question will be self-contained.

7. The primary purpose of summary assessment of costs is the saving of costs and time. A full taxation, which involve the preparation of a full itemized bill of costs and a detailed list of objection and call-over and substantive hearings, will entail a lot of more costs as well as time. For a short matter like the present, it will not be in the parties’ interest to undergo a full taxation.”

10.  Mr Yeung, the director acting on behalf of the plaintiff, states that the defendant’s summons for the variation was filed out of time, and no leave shall be given to the defendant to file the same.

11.  However, in my view, this is similar to the situation of Waddington Limited v Chan Chun Hoo Thomas, unreported, HCA 3291/2003, 7 March 2006, where the application was first by letter within time, although the summons was issued out of time. In that case, Barma J (as he then was) granted leave to the defendant. I would adopt the same analysis that the defendant’s intention to make the application was at least notified to the court and to the other party within the time limit (see paragraph 16 of Waddington), and I therefore grant the defendant an extension of time to file the summons.

12.  Further, Mr Yeung on behalf of the plaintiff also submits that, as stated in the White Book 2024 para 62/9A/1, “… either party is entitled to insist on a taxation of the costs …”

13.  I cannot accede to Mr Yeung’s submissions. Mr Yeung was incorrect in omitting the first half of the sentence, which reads, “where the court has made a provisional summary assessment of the costs of the interlocutory application …” This is the provisional summary assessment referred to in Order 62 rule 9A(1)(b). However, the costs order I made was not a provisional summary assessment, which was subject to either party's right to the costs taxed.

14.  Overall, there is no prejudice to the plaintiff, whether the costs were summarily assessed or to be taxed. The plaintiff has not shown any ground that the costs cannot be dealt with summarily (Order 62 rule 9C(1)(a)).

15.  I do not agree with the plaintiff’s submission that once the court has made an order nisi for the costs to be taxed, the court cannot change it to summary assessment. Order nisi was made before hearing the parties’ submissions, and Order 42 rule 5B was made to cater to this situation. It was allowed in Hornor Resources.

16.  The legal authorities submitted by the plaintiff did not add further to its case.

17.  In such circumstances, I allow the costs order nisi be varied to the defendant’s costs to be summarily assessed.

2^nd Summons - Leave to appeal

18.  The test for granting leave to appeal is whether the appeal has a “reasonable prospect of success”; or whether there is some other reason in the interests of justice why the appeal should be heard.” (District Court Ordinance (Cap 336), s 63A(2) and the White Book 2024, para 59/2A/4).

19.  The plaintiff relies on 3 grounds:

(1) New evidence – the letter of District Lands Office dated 18 October 2023 (“the DLO Letter”);

(2) Director’s fund in support of the plaintiff’s litigation; and

(3) The plaintiff was not given sufficient time by the Master to address the defendant’s bill of costs and to deal with the defendant’s skeleton submissions and list of authorities.

20.  Ground 1—New evidence. I find the DLO Letter is not admissible as further evidence on the appeal as it failed to satisfy the conditions of Ladd v Marshall.

21.  The Ladd v Marshall conditions are:

(1) that the evidence could not have been obtained with reasonable diligence for the use at the hearing below;

(2) the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; and

(3) the evidence must be apparently credible though it need not be incontrovertible.

22.  It should be noted that the DLO Letter was issued in response to Success Leading Investment Limited, not the plaintiff herein. Therefore, it is not the plaintiff’s document. Furthermore, the complaint concerns the placement of miscellaneous articles in car parking spaces or adjoining areas, not the defendant’s area on the 20^th Floor.

23.  As pointed out by Mr. Siu, while Mr. Yeung claimed that the DLO Letter belonged to him as the addressee Success Leading is also one of the companies he owned or operated, the DLO Letter was actually written in response to the letter from Success Leading dated 25 September 2023. Therefore, it was self-serving for Mr Yeung to have written a letter to the District Lands Office on 25 September 2023 after the hearing and claimed the reply letter received in October as new evidence. In this regard, I agree with Mr Siu that the DLO Letter is not something that could not have been obtained with reasonable diligence before that hearing.

24.  For the aforementioned reasons, I find that the DLO Letter is not relevant to the plaintiff’s claim.

25.  But all that aside, I also find that the DLO Letter merely stated the obvious that it was the management office’s responsibility under the DMC, and stated that the management office had taken follow-up actions in dealing with the miscellaneous articles in the car parking spaces and adjoining areas. It would not have any important effect on the Decision.

26.  I therefore reject the DLO Letter as new evidence and refuse to grant leave on this ground of appeal.

27.  Ground2—Director’s fund. Mr Yeung says that he, as a director of the plaintiff, is willing to provide funds and guarantees to pursue the plaintiff’s litigation.

28.  However, I agree with Mr. Siu’s submissions that the plaintiff’s affirmation was carefully framed “to provide funds and guarantee in pursuing the plaintiff’s litigation,” and, to date, there is still no guarantee or undertaking to pay any adverse costs order by the director.

29.  I repeat the reason I gave in paragraph 35 of the Decision.

30.  I also repeat paragraph 36 of the Decision that the plaintiff has admitted that it has no asset to pay for any costs consequence of the litigation.

31.  This ground simply has no merit.

32.  Ground 3—Insufficient time given to the plaintiff. The plaintiff challenges that the 50% discount given by the Master on the defendant’s bill of costs did not adequately reflect the insufficient time given to the plaintiff to respond.

33.  Mr Siu submits, and I agree, that the plaintiff did not make any submission on the 50% discount during the last rehearing, it should not be allowed to make any new submissions at the present application for leave hearing.

34.  In any event, I believe that I have adequately dealt with this ground in paragraphs 39 to 41 and 45 to 47 of the Decision.

35.  I refuse to grant leave on this ground.

36.  To conclude, I fail to see how the plaintiff’s appeal would have any reasonable prospect of success.

Conclusion

37.  For the above reasons, the plaintiff’s application for leave to appeal (plaintiff’s summons dated 1 November 2023) is dismissed. Costs of the said application to be paid by the plaintiff to the defendant forthwith, with certificate for counsel, to be summarily assessed.

38.  The defendant’s application to vary the costs order nisi (defendant’s summons dated 11 December 2023) is allowed. I make an order in terms of the summons. Costs of the said application to be paid by the plaintiff to the defendant forthwith, with certificate for counsel, to be summarily assessed.

39.  I shall record that the actual time used for today’s hearing is 50/50 for the two summonses, and the parties have agreed that costs should follow the event.

40.  Since the defendant has already submitted his statement of costs for summary assessment (dated 29 December 2023) for the above two summonses, I direct the plaintiff to lodge and serve its list of objections (if any) on or before 12 April 2024.

41.  As to the costs of the appeal (plaintiff’s notice of appeal dated 13 March 2023 against the Master’s decision) and the costs of the defendant’s summons to file and serve affirmation (summons dated 21 June 2023) in the cause of the appeal against the Master’s decision, the defendant has submitted his statement of costs (dated 8 December 2023). I direct the plaintiff to lodge and serve its list of objections (if any) on or before 22 April 2024.

42.  The above summary assessments will be conducted on paper.

The Plaintiff was represented by Mr Yeung Hon Keung Larry, appeared in person

Mr Stephen Siu, instructed by Li & Lai, for the Defendant

DCCJ 1858/2022

[2023] HKDC 1451

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1858 OF 2022

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DECISION

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1.  This is the plaintiff’s appeal from the Order of Master Matthew Ho dated 28 February 2023, ordering, inter alia, that:-

(1)  The plaintiff is to pay into Court the amount of HK$386,733 as security of the defendant’s costs within 21 days as per the defendant’s summons dated 16 September 2022 (for security for costs);

(2)  Costs of the defendant’s summons dated 5 September 2022 (for striking out) and the defendant’s summons dated 16 September 2022 (for security for costs) be paid by the plaintiff to the defendant, summarily assessed at HK$110,000; and

(3)  The plaintiff’s summons filed on 27 February 2023 to expunge the defendant’s affirmations in reply and the defendant’s skeleton submissions and list of authorities (the Expunge Summons) be dismissed with no order as to costs.

2.  The plaintiff applies to dismiss (1) and (2) and to allow (3).

3.  Mr Yeung Hon Keung Larry (“Mr Yeung”) is the director of the plaintiff and is authorized by the plaintiff to appear in this hearing. The defendant is represented by Mr Siu of counsel.

The parties’ cases

4.  Mr Yeung is the registered owner of Flat G, 19^th Floor, Block 6, Laguna City, Kwun Tong, Kowloon, Hong Kong (“Flat 19G”). The plaintiff is a company registered in Hong Kong with a paid-up capital of HK$100 and is a sub-tenant of Flat 19G.

5.  The defendant is the registered owner of the unit immediately above, namely Flat G, 20^th Floor, Block 6, Laguna City, Kwun Tong, Kowloon, Hong Kong (“Flat 20G”). The defendant is also the registered owner of Flat 20H, which was constructed as a combined/connected unit with Flat 20G.

6.  Laguna City (麗港城) is a widely known private housing estate in the area, with a building age of approximately 30 years.

7.  The plaintiff claims that the defendant has been in breach of the DMC and caused nuisance, annoyance, and disturbance to the plaintiff by obstructing the common area and corridor on the 20^th floor (the floor one level above the plaintiff’s premises) with “bicycles, toys, skateboards, cushions, large boxes, chains, umbrellas, shoes, meal boxes containing waste food and residue, rubbish, things and other articles” near the 20^th floor lift lobby outside Flat 20G.

8.  The photos (currently available) provided by the plaintiff showed that, on divers dates, there were 2 to 3 bicycles, a scooter, a skateboard (all were for children’s use), shoes, and sometimes a small bag of finished meal boxes being left in front of the entrance of Flat 20G.

9.  The defendant denies any obstruction or nuisance caused by those articles. The defendant said that those items were only placed outside his door and that area was a recessed area, which would not cause any obstruction to other neighbours as he owned both units of Flat 20G and Flat 20H. He also emphasized that Flat 19G and Flat 20G&H were located on different floors, and he did not understand how those items could cause any nuisance or disturbance to the plaintiff.

10.  In any event, the plaintiff claims that those items placed outside Flat 20G would cause fire hazards, hygiene, rat and mouse, and cockroach problems. Mr Yeung (the director of the plaintiff) said that he had to go up to the 20^th floor to walk down to the 19^th floor whenever the lift was out of service or under maintenance. He said that the articles placed by the defendant would cause him inconvenience and annoyance day and night from time to time.

11.  The plaintiff said it had complained to the Fire Department, the police, and the management office of the estate, but none of them had taken any action.

12.  On 24 May 2022, the plaintiff issued the Writ and commenced the proceedings against the defendant.

13.  Although Mr Yeung said he was the one (also as an occupier of the plaintiff’s premises) who suffered from the nuisance, he did not sue in his own personal capacity as the registered owner of Flat 19G. Instead, the plaintiff obtained its locus to sue for nuisance under the occurrence of the following events:-

(1)  On the same day as the Writ was issued (ie 24 May 2022), the plaintiff submitted to the Stamp Office a tenancy agreement dated 17 May 2022 made between the plaintiff (“Success Top”) as tenant and one First Develop Limited (“First Develop”) as landlord for a portion of Flat 19G at a rent of HK$3,000 per month for 3 years (“Success Top Tenancy”). Clause 2 of the Success Top Tenancy stated that the landlord and the tenant had ratified the term of the tenancy commenced from 21 October 2020 until 20 October 2023 (ie effective approximately two years ago). Clause 11 stated that the plaintiff had paid the full 3-year rent of HK$72,000 in one go at the date of the agreement;

(2)  According to Mr Yeung, First Develop (owned by one Mr Leung Kin Hang) is a company registered in Hong Kong and carries on the telecommunication business. Mr Yeung said he had no relationship with Mr Leung or First Develop. He only leased a portion of Flat 19G to First Develop for storage of mobile phone parts in 2020, and therefore, First Develop is a tenant of Flat 19G (“First Develop Tenancy”). He said as such, First Develop was able to sub-let one part of its portion of Flat 19G to the plaintiff as a sub-tenant. However, Mr Yeung did not provide any document in support of the First Develop Tenancy; and

(3)  Mr Yeung said that the current action was taken out by the plaintiff when his business partner, Madam Cheung Wing Yam, replaced the said Mr Leung (who is also a director of First Develop) as director of the plaintiff on 16 May 2022 (one week before the issuance of the Writ). Mr Yeung said that he only became involved on 14 July 2022 when he became a director of the plaintiff and carried on the litigation. He said the issuance of the Writ was Madam Cheung’s idea for and on behalf of the plaintiff, not his.

14.  Mr Yeung said that all these steps were mere coincidences. He said that they were not planned or premeditated for using the plaintiff as a vehicle to bring litigation.

15.  The plaintiff seeks injunctive relief and damages at HK$3,000 per month for the loss of use in respect of the part of the portion of Flat 19G as a sub-tenant where the plaintiff could not enjoy the premises because of the defendant’s nuisance.

16.  The defendant then applied to strike out the plaintiff’s claim and alternatively, for an order for security for costs.

17.  At the hearing before Master Matthew Ho on 28 February 2023, the learned Master dismissed the striking out summons on the ground that the plaintiff’s case was “not entirely unarguable” but found in favour of the defendant for granting an order for security for costs against the plaintiff.

18.  The plaintiff appeals against (mainly, according to Mr Yeung) the order for security for costs. However, he also added the appeal against the costs order and the Expunge Summons.

Applicable principles for appeal against master’s decision

19.  It is trite that an appeal from a master to a judge in chambers under RDC Order 58 rule 1 is dealt with by way of an actual rehearing of the application which led to the order under appeal, and the judge will treat the matter as though it came before him for the first time (Hong Kong Civil Procedure 2023, note 58/1/2).

20.  The judge will of course give the weight it deserves to the previous decision of the master; but he is in no way bound by it. Further, the judge is entitled, if he thinks fit, to adopt the master’s reasoning in his own judgment without setting out the reasoning himself (supra).

21.  However, an appeal against a costs order made by the master is not a rehearing of the matter. The appeal will not be allowed unless the costs order made was unreasonable or the master had erred in law (Wealth Growth (HK) Investment Ltd v Si Bun Bun Carmen Co Ltd and Anor[2021] HKDC 1363; Hong Kong Civil Procedure 2023, note 58/1/6).  

Applicable principles for granting security for costs

22.  The law on security for costs under RHC (or RDC) Order 23 rule 1 or section 905 of the Companies Ordinance (Cap 622) are similar and are well settled. It has been succinctly summarised by Coleman J in Sun Hing Ginza Ltd v Chan Kai Yan [2022] 4 HKLRD 890:-

“17. … Both [O 23 r 1 and s 905] empower the Court to order a plaintiff to give such security for the defendant’s costs of the action or other proceedings as it thinks just, when there is reason to believe that the plaintiff will be unable to pay the costs of the defendant if ordered to do so.

18. The approach involves two stages. First, the defendant has to show that there is reason to believe that the plaintiff will be unable to pay an adverse costs order. The defendant is not expected to produce conclusive evidence of the plaintiff’s lack of means; it is sufficient to point to some credible evidence about the surrounding circumstances and then it is up to the plaintiff to adduce evidence to the contrary. The Court shall decide whether a reasonable person with ordinary experience of daily life would consider the plaintiff unable to pay: see, for example, Buildtech Enterprise International Ltd v OK Construction Materials (Supply) Co Ltd[2021] HKCFI 1837.

…

20. In the second stage, the Court should consider whether, in all the circumstances, it is fair to grant security for costs. The Court can take into account a wide range of different factors, including whether the plaintiff is using its impecuniosity to put pressure on the defendant, the plaintiff’s prospects of success, whether the security for costs order will stifle the plaintiff’s claim, and delay in making the application: see Golden Tech (Asia) Ltd v Po Yuen (To’s) Machine Factory Ltd (HCA 4517/2001, unreported, 27 May 2004).”

23.  In order to determine whether the plaintiff’s claim would be stifled, the court should consider not only whether the plaintiff company can provide security out of its own resources to continue the litigation, but also whether it can raise the amount needed from its directors, or shareholders, or other backers or interested parties. It is for the plaintiff to satisfy the court that it would be prevented by an order for security from continuing the litigation (Wing Hing Provision, Wine & Spirits Trading Co Ltd v Hanjin Shipping Co Ltd [1998] 4 HKC 461).

24.  Above all, the court has a complete discretion whether to order security, and accordingly it will act in the light of all the relevant circumstances (supra).

The Master’s decision

25.  Both Mr Yeung (on behalf of the plaintiff) and Mr Siu (appearing for the defendant in this appeal) attended the hearing before Master Matthew Ho on 28 February 2023. The learned Master gave his reasons for ordering security for costs at the hearing.

26.  At this hearing before me, Mr Siu referred to and read out the Master’s reasoning as part of his submissions. I would summarize the Master’s reasoning as follows.

27.  First, the Master considered that there was credible testimony that there was reason to believe that the plaintiff would not be able to pay the defendant’s costs if the defendant succeeded in the defence:-

(1)  The plaintiff is a limited company with nominal share capital;

(2)  Despite the defendant’s request, the plaintiff has been unable to provide evidence showing that it was financially viable to pay the defendant’s costs. The plaintiff’s claim that it has good and sound business is a bare assertion without any proof; and

(3)  There is no evidence that the plaintiff holds any valuable asset. Worst still, when asked whether it had any assets, the plaintiff claimed it had a ‘landed interest’ in a piece of land in the New Territories. It turned out that such land was merely a rented land for which the plaintiff paid a monthly rent of HK$1,000/month. An inference can thus be drawn that it has no valuable asset.

28.  Second, the Master found that the evidence suggested the fact that the plaintiff might refuse to satisfy any costs order in favour of the defendant:-

(1)  When the plaintiff claimed it had a land interest in a piece of New Territories land when asked about its means to satisfy costs order, it was later found out that the land interest was a rented land. It takes little common sense to tell that a rented land is not an asset. There is no reason for the plaintiff to give such an answer other than with the view to mislead the defendant. The plaintiff’s conduct showing no hesitation to proffer inaccurate evidence to avoid a security for costs order, shed light on its tendency to avoid any costs order against it; and

(2)  The defendant had shown a track record of failing to satisfy the HK$800 costs order made by Master B Mak on 10 January 2023 despite repeated demands.

29.  The Master had not lost sight of the fact that an imposition of a security might deter the plaintiff from pursuing a genuine claim. In that regard, the Master considered the following factors:-

(1)  The plaintiff has not provided any particulars as to how it would stifle its claim. For instance, the plaintiff has not provided any evidence as to what amount of security would create a financial burden on it and thus prevent it from pursuing its claim;

(2)  Under the Wing Hing Provision case, the court is entitled to take into account the fact that the plaintiff can raise funds from its directors. Mr Yeung, who confirmed himself as a director of the plaintiff, is the owner of Flat 19G and thus has a real property in Hong Kong and would be able to raise funds. Provided that the security is in a reasonable amount, it should not stifle the plaintiff’s claim; and

(3)  On balance, an order for security for costs against the plaintiff should be made.

Appeal against security for costs

30.  First of all, I find that the learned Master’s reasoning is entirely correct, and I would gratefully adopt the same for the purposes of this appeal.

31.  Next, I would consider whether the plaintiff has raised any fresh points in this appeal. But there is none. Perhaps, however, a couple of questions have emerged during the hearing, and I shall address them in turn.

32.  Before me, Mr Yeung conceded that since he had only leased a portion of Flat 19G to First Develop, he was still an occupier as the registered owner or a co-occupier sharing the flat with First Develop and the plaintiff, with First Develop leasing back a part of its portion to the plaintiff. In the circumstances, it seems to me that the alleged nuisance would affect Mr Yeung personally more than the plaintiff company. For instance, it would be very remote to suggest that the company would suffer from any obstruction on the upper floor, other than the cockroaches (as suggested by Mr Yeung) running into Flat 19G from Flat 20G. It seems illogical that Mr Yeung, as the owner and landlord of the property, did nothing but leave the second-tier sub-tenant to take legal action. Mr Yeung could not give any explanation other than saying that it was part of a ‘business deal’ for the plaintiff to become a sub-tenant. (In the course of his answering to the court, Mr Yeung initially sought to distance himself from the plaintiff by saying he was not related to the plaintiff before being appointed as director (see Cheung 4 §§11-18), but then admitted that the plaintiff was a limited company he used for convenience in doing business with First Develop, instead of using his personal name). He could not provide further details of the so-called business deal. It raised doubt as to whether the plaintiff’s claim is bona fide.

33.  Further, Mr Yeung has accepted that it would be difficult to prove any cockroaches going from Flat 20G to Flat 19G while he preferred to leave it to trial. Without going into the details of the merits of the plaintiff’s case, I consider that the prospects of success of the plaintiff’s case is not so high that it could deter the defendant’s application for security.

34.  Another matter worth noting is that, during the plaintiff’s submissions in reply, Mr Yeung at one point suggested that as he is the director of the plaintiff and he is also the owner of Flat 19G, the plaintiff would have sufficient means to pay for any legal costs consequence.

35.  It seems to me that an interesting question has arisen: if there is proof that the plaintiff’s director has assets (so that the proceedings would not be stifled), would that defeat the defendant’s claim that the plaintiff is unable to pay its costs? I do not think so. I think there is a significant difference between the two matters. The fact that the plaintiff's director has funds to assist the plaintiff in pursuing its litigation against the defendant does not necessarily mean that the plaintiff company itself would have sufficient funds to pay its costs where there is no guarantee that the director would be willing to pay for the plaintiff's liabilities or the costs consequences. After all, the plaintiff company remains as a separate entity, the nature of which propounds limited liability.

36.  Worst of all, in the course of responding to the court’s enquiries, the plaintiff has made further admission that “the court is correct that, at this stage, there is no asset to support the plaintiff company to pay for any costs consequence.”

37.  Therefore, I consider that an order for security for costs against the plaintiff should be made.

38.  It is not necessary for me to deal with the dispute between the parties as to the plaintiff’s delay in serving the Notice of Appeal and the validity of the service of the Statutory Demand by the defendant, as I had accepted the parties’ explanation in the last hearing on 4 July 2023 that there were mismatches of time in the service of documents due to both parties’ change of address.

Quantum

39.  Mr Yeung did not make any submissions on the 50% deduction made by the learned Master, other than to complain that the defendant’s Bill of Costs was filed late and he had not had sufficient time to consider.

40.  Actually, the Master had taken into account the fact that the Bill of Costs was only provided in the last round of affirmation filed on 21 February 2023 and that the plaintiff might not have ample opportunity to scrutinize the items. The Master therefore took a more vigilant approach and gave a 50% discount to the Bill.

41.  I have no disagreement with the Master’s approach. I also find that the security in the sum of HK$386,733 is appropriate.

The costs order of HK$110,000

42.  The plaintiff has not made any submissions under this head.

43.  This part of the appeal is not a rehearing de novo. The learned Master had considered that although the summons for striking out was dismissed, the summons for striking out and the summons for security for costs were in fact seeking an alternative remedy against the plaintiff. Therefore, the defendant was the substantial winner of the application, and the learned Master ordered the plaintiff to bear the costs of both summonses and summarily assessed at HK$110,000.

44.  I would not disturb the learned Master’s decision on costs. The appeal under this head should be dismissed.

The Expunge Summons

45.  As stated in the Plaintiff’s summons to expunge, the defendant’s 2^nd Affirmation in reply, the Affirmation of Wong Pui Yan Cecilia for the defendant, the defendant’s skeleton submissions and list of authorities were all dated 20 February 2023 and filed on 21 February 2023. As such they were all filed within time pursuant to Master B Mak’s order dated 10 January 2023. In fact, the plaintiff only complained that it did not receive those documents until 24 or 26 February 2023.

46.  I agree with Mr Siu’ submissions that the tight time schedule was caused by the plaintiff itself, and that the plaintiff was given sufficient time to respond to the defendant’s skeleton submissions at the hearing. Mr Siu pointed out that Mr Yeung was from time to time asked by the court, and positively confirmed that he could follow the submissions. There was no evidence to show that the plaintiff suffered any prejudice in the hearing before the learned Master.

47.  I find no error in the learned Master’s dismissal of the summons.

Conclusion

48.  Accordingly, the appeal should be dismissed with costs.

49.  I make an order that:-

(1)  The plaintiff’s appeal is dismissed; and

(2)  On a nisi basis, the plaintiff pays the defendant the costs of the appeal, with certificate for counsel, and such costs to be taxed if not agreed.

50.  The costs order nisi shall become absolute in 14 days from the handing down of this Decision.

The plaintiff, acting in person and present

Mr Stephen Siu, instructed by Li & Lai, for the defendant