陳生 對 陳國

Read the full judgment text of CACV 137/2015 on BabelCite. This Court of Appeal judgment was delivered on 8 September 2015 before 關淑馨, 潘兆初.

Civil appeal – security for costs – application under Order 59 rule 10(5) of the Rules of the High Court – plaintiff 陳生 (Chan Sang) and defendant 陳國 (Chan Kwok) are brothers who are registered co-owners of a shop at Wan Tsui House, Chai Wan, Hong Kong, holding the property as tenants in common in equal shares – plaintiff claimed he purchased the property in 1983 with a $60,000 loan from his father, and agreed with his father and the defendant that the defendant would be added as a registered co-owner to secure repayment of the loan, with the defendant's name to be removed upon full repayment – defendant denied this account and claimed that in 1982, the father used the defendant's assets to lend $40,000 to the plaintiff, and that in 1983, the father, plaintiff and defendant agreed that the defendant would invest alongside the plaintiff to purchase the property, with the prior $40,000 loan being treated as part of the defendant's investment – the property was accordingly registered in both names as tenants in common in equal shares – after a six-day trial before Chow J in the Court of First Instance, the judge accepted the evidence of the plaintiff and his witnesses, found that the plaintiff was the sole beneficial owner of the property, and on 15 May 2015 ordered the defendant to transfer his half interest and pay the plaintiff's costs – on 11 June 2015, the defendant filed a notice of appeal – both parties were legally represented at trial, but the defendant acts in person on appeal – the plaintiff applied for security for costs in the amount of $488,750 – whether special circumstances exist warranting exercise of discretion to order security for costs under O.59 r.10(5) RHC – whether the defendant lacks financial means to pay any costs that may be awarded against him – the defendant owns no other property in Hong Kong, is 72 years old, suffers from long-term illness requiring breathing through a tracheostomy, has not worked for four years, and his former fruit business with his wife at the property ended in 2010-2011 – whether the appeal has reasonable prospects of success sufficient to resist the security application – the appeal challenges the trial judge's factual findings regarding the credibility of witnesses, and the defendant contends that the judge failed to properly consider that the property was held by a company jointly owned by both parties – applicable legal test for appellate interference with factual findings – appellate court will only interfere if the trial judge clearly erred – preliminary assessment that the appeal faces significant difficulty – the court found the appeal to be challenging with uncertain prospects – appropriate amount of security – plaintiff's costs estimate of $489,550 considered excessive – appeal can be completed in one day, not two – reasonable security assessed at $230,400, including $180,000 for counsel's fees – additional $50,000 for costs of the security application itself – total security ordered at $280,400 – defendant to pay security within 28 days from the date of the order – if not paid within 28 days or such extended period as the court may allow, the appeal to be dismissed without further order upon written notification to the Registrar – if the appeal is dismissed in this manner, the defendant to pay the costs of the appeal on a party-and-party basis to be assessed by a Registrar if not agreed – costs of the security application also to be paid by the defendant on a party-and-party basis

Legal issues: Whether to order security for costs under O.59 r.10(5) RHC · Whether the appeal has sufficient prospects to resist the security order · The appropriate amount of security for costs

Outcome: Security for costs ordered in the amount of $280,400; the defendant must pay this amount within 28 days, failing which the appeal will be dismissed without further order

Cited by 5 cases