Tsang Kin Chung Terry v. Wong Chung Mang Jonah and Another

CACV 250/2021

[2022] HKCA 1080

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 250 OF 2021

(ON APPEAL FROM HCA NO. 2381 OF 2019)

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Before :  Hon Cheung and Chu JJA in Court

Date of Decision :  19 July 2022

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D E C I S I O N

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Hon Cheung JA (giving the Decision of the Court) :

1.This is an application by the 1^st and 2^nd defendants for leave to appeal to the Court of Final Appeal against our judgment of 7 March 2022 by which we ordered the defendants to pay security for costs of their appeal in the sum of $300,000. We will deal with the application on paper.

I.  Leave to appeal

2.The 1^st and 2^nd defendants rely on the ‘or otherwise’ limb under section 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance (‘HKCFAO’) (Cap. 484) in support of their application. They rely on two grounds.

Ground 1

‘The learned Judge (‘sic’) erred in drawing the inference that the 1^st and 2^nd Defendants are impecunious on the basis of the Defendants’ inability to pay the sum of HK$8 million and HK$6,422,025 by certain dates.’

Ground 2

‘Further or alternatively, the learned Judge (‘sic’) erred in law in granting security for costs on the ground that the merits of the appeal are not real and substantial.’

II.  Our view

3.It is usually the practice of this Court to defer to the Appeal Committee of the Court of Final Appeal where the leave sought is based on the ‘or otherwise’ ground. However, in this case, we are of the view that the matters rely upon by the defendants are totally devoid of merits, and they do not satisfy the threshold required under this ground. The starting point is that the order we made is an interlocutory decision based on the exercise of discretion. The defendants have not been able to show that there are highly exceptional circumstances for the Court of Final Appeal to accept jurisdiction under the ‘or otherwise limb’ : Chinachem Charitable Foundation Ltd v. Chan Chun Chuen (2011) 14 HKCFAR 798 at [57].

4.On the issue of impecuniosity under Ground 1, the defendants argue that this Court has misinterpreted the case of Bradford & Bingley Plc v Rashid [2006] 1 WLR 2066 in that while there was no indication that the sum of $6,422,205 was disputed by the defendants, there was also no evidence that they had admitted liability to pay the amount. There is no merit in this argument. The defendants’ silence on the issue of liability is clearly an indication that liability was admitted when their proposal was simply to ask for time to repay the money. It was not an attempt to ‘negotiate and compromise a disputed liability’ but rather, it was a discussion ‘for the repayment of an admitted liability’ for which the ‘without prejudice’ rule does not apply.

5.The defendants further contend that the inability to pay before ‘does not equate with his (‘sic’) ability to pay now’. This is an absurd argument. There is not a scintilla of evidence from the defendants that even at this late stage they have any available means to pay.

6.Ground 2 deals with the implication of a term under Clause 12.3 of the parties’ loan agreement which the defendants contend to have an ‘inborn defect’. This argument has already been addressed by the decision below of Mr Recorder Stewart Wong SC. All that we said in our decision is that the defendants have not been able to show that they have such a meritorious appeal on this point that we should not exercise the discretion in favour of the plaintiff notwithstanding their impecuniosity. The defendants are again repeating the same arguments that had been canvassed. They have certainly not demonstrated any highly exceptional circumstances which may justify the granting of leave.

III.  Conclusion

7.Accordingly, the application is dismissed with costs to the plaintiff summarily assessed at HK$59,000.

Ms Alison Choy, instructed by Pansy Leung Tang & Chua, solicitors for the Plaintiff

Chau & Co., solicitors for the 1^st and 2^nd Defendants