Li Ming and Others v. Liu Yiu Keung also known as Stephen Liu and Another

HCA 86/2018

[2023] HKCFI 884

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 86 OF 2018

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BETWEEN

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DECISION

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A. The application

1.This is the application by summons of 13 September 2022 taken out by the defendants (“D1” or “Liu”, “D2” or “Yen”, and collectively “Ds”) against the plaintiffs (“P1” to “P5”, and collectively “Ps”) for security for costs up to and including exchange of witness statements in the sum of HK$14,763,290.67.

2.The underlying disputes between the parties concern the disputes over the shareholding and control of China Shanshui Investment Company Limited (“CSI”), China Shanshui Cement Group Limited (“CSCG”), and Shandong Shanshui Cement Group Company Limited (“Shandong Shanshui”).

3.Relevant to the present applications parties have made reference to three prior decisions of mine on the Shanshui disputes, they being my Decisions of:

(a) 28 October 2020 herein dismissing Ds’ application to strike out Ps’ claim[1] (the “Strike-Out Decision”);

(b) 23 June 2021 (in HCA 1661, 1766, 2191/2014 & HCA 623, 939, 1564/2015 (Consolidated) (the “Trust Actions”) and HCA 1282/2017) dismissing the Former Receivers’[2] application for a lien over the Receiver Shares[3] (the “FR Lien Decision”); and

(c) 7 December 2020 (in HCA 548/2019 (“HCA 548”)) dismissing the application by Tianrui International to inter alia set aside the service of the writ therein[4] (the “548 Judgment”).

I have in those decisions dealt with in some details the background facts relevant to the present application, which (together with the terms and abbreviations used) I will adopt.

4.Mr Jeffrey Chau appeared for Ds. Mr José-Antonio Maurellet SC leading Mr Alexander Tang appeared for Ps.

B. The affirmatory evidence

5.In support and reply Ds have filed respectively Liu’s 3^rd and 4^th Affirmations (dated respectively 8 September 2022 (“Liu/Aff3”) and 23 February 2023 “Liu/Aff4”)).

6.In opposition Ps have filed P3’s 6^th Affirmation of 9 January 2023 (“Zhao/Aff6”).

7.Placed before me in addition are some earlier affirmations which parties have filed, which I will make reference to as appropriate.

C. Ps’ claim herein

8.I have summarized at §§22 to 24 of the Striking-Out Decision the nature of Ps claim against Ds. In gist, Ps’ case is that Ds as receivers of the Receivership Shares owed to each of the Employee Plaintiffs fiduciary duties. They however failed to act in their best interest. In particular, Ds conspired with Tianrui International to put Tianrui International and themselves in control of the board of CSCG and thereafter attempted to take steps to dilute CSI’s shares in CSCG in favour of Tianrui International and to strip away all the assets of Shandong Shanshui. Ds also received fees and remuneration from inter alia Tianrui International and/or parties related to Tianrui International, CSCG and/or Shandong Shanshui, and thereby put themselves in position of conflict. I refer for ease of presentation to the above as the “Alleged Wrongdoings”)

D. Ps not ordinarily resident in Hong Kong

9.In respect of an application for security under Order 23 rule 1(1)(a), whether the plaintiff “is ordinarily resident out of the jurisdiction” is the threshold issue.

10.It is not in dispute that Ps are not ordinarily resident in Hong Kong.

11.Now that this threshold is cleared, this court’s discretion is engaged. If, having regard to all the circumstances of the case, the court thinks it just to do so, the court may order Ps to give such security for Ds’ costs.

12.The discretion is a real one. I repeat my discussion of the nature of the discretion in Hong Kong Zhixin Financial News Agency Ltd v China Maple Leaf Educational Systems Limited [2019] HKCFI 2921 at §12.

13.Whilst there is no inflexible or rigid rule that a plaintiff resident abroad should provide security, it stands to reason that in the absence of any additional circumstances or evidence pointing otherwise, it would prima facie be just for such a plaintiff to be ordered to pay security. That order, if made, is however not upon the application of any inflexible or rigid rule, but reached with regard to all the circumstances of the case.

E. Whether Ps have substantial assets of a fixed and permanent nature in Hong Kong

14.In Crane World Asia Pte Limited v Hontrade Engineering Limited (HCA 109, 256 and 462/2014, 5 May 2016), Au-Yeung J observed at §20 that:

“Security will not be required from a person permanently residing out of the jurisdiction, if he has substantial property, whether real or personal, within it. The property must be of a fixed and permanent nature, which can certainly be available for costs; or at any rate such as common sense would consider to be so. Shares in a Hong Kong private company do not amount to substantial assets within the jurisdiction readily available for costs, because the value of such shares is difficult to ascertain and it is uncertain whether a buyer can readily be found for them.”

15.In Sunni International Ltd v Kao Wai Ho Francis [2021] 1 HKLRD 841, Peter Ng J cited and applied Aoun v Bahri [2002] EWCA Civ 1390, wherein Tuckey LJ observed at [11], [13] and [14] that:

“[11] Traditionally, security was provided by payment into court or solicitors undertakings. Nowadays bank guarantees are the norm, provided they are from first class banks. Other forms of security are not ruled out, but they must be copper bottomed in the sense that they can be enforced in a simple and straight forward way — otherwise the purpose of ordering security is defeated …

…

[13] I do not think that the placing of the share certificate with the solicitors provides the respondent with security of the quality to which they were entitled under the order …

[14] In short the matter is fraught with uncertainty and difficulty. Any attempt to execute against such security would not be a simple and straightforward matter, as the court intends when it makes such an order. The respondents were entitled to security which could be realised with relative ease.”

16.In Monde Petroleum SA v WesternZagros Ltd [2015] EWHC 67 (Comm), Popplewell J observed at §61 that:

“It is conventional to order security to be given either by payment into court or by the provision of a guarantee from a first class London bank. That practice recognises that the security should be in a form which enables the defendant to recover a costs award made in its favour at the trial from funds which are readily available, such that there is little risk of delay or default in enforcement. Although security may be ordered in an alternative form, that form should be such as to fulfil the same function, so as to allow simple and swift enforcement of a costs order from a creditworthy source. In practice any such alternative form of security must be such as can properly be regarded in these respects as at least equal to, if not better than, security by payment into court or provision of a first class London bank guarantee …”

17.Ps has pointed to their holding of 16,783 CSI shares as substantial assets within the jurisdiction.

18.Mr Chau has pointed amongst others to the uncertainty in the beneficial ownership of those shares, the difficulty in their valuation (given the volatility of the price of the CSCG shares which it CSI holds, the history of suspension, the on-going petition for the winding up of CSCG in Cayman Islands, the ongoing lawsuits for the ownership and control of CSI, and the involvement of CSI in other litigations), and the ease with which they could be liquidated. He submits that those shares do not qualify as any substantial assets of a fixed and permanent nature, and that this remains so despite the undertaking offered by Ps through Mr Maurellet for their non-alienation.

19.In the case of a non-resident plaintiff having substantial assets of a fixed and permanent nature within the jurisdiction, it can and even will be a clear-cut case for the court to exercise its discretion refusing any application for security. I have considered the nature of those CSI shares which Ps are holding. I accept Mr Chau’s submissions that they do not qualify as any substantial assets of fixed and permanent nature. Their existence cannot support any such clear-cut case for refusing Ds’ application. However, as submitted by Mr Maurellet, their existence and the offer of undertaking can be a consideration for this court to take into account in its overall exercise of discretion. I agree. I will come back to it.

F. Ps’ stance

20.Ps’ principal case is this: despite they being ordinarily resident out of Hong Kong, a confluence of factors militates strongly against granting security. Those factors are summarized by Mr Maurellet at §3 and 4 of his written submissions, to the following effects:

(a) Bearing in mind other on-going proceedings, Ds or the Former Receivers are themselves actually in the category of an “attacker”;

(b) There is no practical difficulty for Ds to recover costs should they prevail, having regard to:

(i) Ps’ substantial assets within the jurisdiction; and

(ii) the likelihood of the law on reciprocal enforcement having changed by the time any costs orders may need to be enforced against Ps in the future;

(c) The quantum sought is in any event manifestly too high.

G. Whether Ds “attackers”

G.1 The applicable principles

21.Mr Maurellet cites in support what this Court has discussed and set out at §13 of Hong Kong Zhixin, as follows:

“That the applying defendant has pleaded a counterclaim is a relevant consideration. The question is whether the defendant is as much an ‘attacker’ as the plaintiff:

(a) As commented upon also in §23/3/3 of the Hong Kong Civil Procedure 2020:

‘…Additional principles apply in cases where security for costs is sought against a plaintiff against whom the defendant has made a counterclaim. These principles are conveniently summarised in Ai Zhong v Metrofond Ltd [2010] 1 HKLRD 213, 221…’

(b) In Ai Zhong, Yam J at §22 summarized as follows the considerations:

‘22. It has been said that when a defendant counterclaims, there is a chance that an application by the defendant for security of costs against the plaintiff would be refused. It is useful to set out the various rules concerning the importance of who is the ‘real attacker’ in a proceeding before I consider the arguments from counsel of both sides:

(a) The Court has a discretion in all applications for security for costs, and it is not a question of merely considering whether the claim and counterclaim arise out of the same issue of fact but a question of 'what is fair and just in all the circumstances'. (Hutchison Telephone (UK) Ltd v Ultimate Response Ltd [1993] BCLC 307, per Dillon LJ.)

(b) Application for security for cost should be refused if it will prevent the plaintiff from pursuing its claim but in the course of defending the counterclaim all the same matters would be canvassed as would be canvassed if the plaintiff were to pursue its claim. (Goal Setting Consulting Co Ltd v Unigraphics Solutions Asia/Pacific Inc (unrep., HCA 994/2003, [2005] HKEC 20), citing BJ Crabtree (Insulation) Ltd v GPT Communications Systems (1993) 59 BLR 43.)

(c) Application should also be refused when the cost incurred by the defendant for the purposes of the defence might equally and perhaps preferably be regarded as costs necessary to prosecute the counterclaim. (Goal Setting Consulting Co Ltd v Unigraphics Solutions Asia/Pacific Inc, citing BJ Crabtree (Insulation) Ltd v GPT Communications Systems.)

(d) The existence of a counterclaim arising out of the same matters as that in the plaintiff’s claim per se does not affect the Court’s ability to order security for costs against the plaintiff. (Winghing Investments Ltd v Lee Hoi Wing (unrep., CACV 378/2005, [2006] HKEC 378).)

(e) It is pertinent to ask whether in the particular case the counterclaim is a cross‑action or operates as a defence, that is to say merely operates as a defence. (Hutchison Telephone (UK) Ltd v Ultimate Response Ltd, per Dillon LJ.)

(f) In determining the question in (e), the most important factor to consider is whether 'the claim by the plaintiffs and the cross‑claim by the defendants — raise essentially the same issues and are going to be fully litigated anyway so far as one can tell'. (BJ Crabtree (Insulation) Ltd v GPT Communications Systems, per Bingham LJ at p.54.)

(g) In determining the question in (e), the marked discrepancy in size between the amount claimed in the action and the very much greater amount claimed by the cross‑claim is also a relevant factor. (Hutchison Telephone (UK) Ltd v Ultimate Response Ltd, per Dillon LJ.)

(h) A defendant should not be required to give security for costs if he is only defending himself from the plaintiff’s claim. (Hutchison Telephone (UK) Ltd v Ultimate Response Ltd, per Bingham LJ.)

(i) When both the plaintiff and defendant can be viewed as attackers, the treatment of both parties in security for costs should be the same. (Samuel J Cohl Co v Eastern Mediterranean Maritime Ltd [1980] 1 Lloyd’s Rep 371, cited with approval by Ma J in Brand Farrar Buxbaum LLP v Samuel‑Rozenbaum Diamond Ltd [2003] 1 HKLRD 600.)’ ”

22.I accept Mr Maurellet’s submissions, relying on Anglo Petroleum Ltd v TFB Mortgages Ltd [2004] EWHC 1177 (Ch), that in the application of the principles canvassed above, the fact that the claim and the cross-claim arise in different actions do not matter:

(a) In Anglo Petroleum, 2 separate actions between similar parties were involved. In Action A, the lender sued the borrower and the guarantor for repayment of the debts. In Action B, the borrower sued the lender for various forms of relief arising out of the same transactions. Park J refused the lender’s application for security for costs against the borrower in respect of certain parts of the borrower’s claim in Action B. The learned Judge summarized his reasons as follows, that “even if security was ordered and was not provided, [the borrow and the guarantor] could still advance their arguments … by way of defence to [Action A]”[5];

(b) Park J explained in further details at [30] to [33] of the judgment, that:

“[30] It sometimes happens that a single underlying dispute between two persons gives rise to two actions: each sues the other. There might be a claim and counterclaim within one legal action; there might be two separate actions. Suppose that A is in dispute with B about some underlying issue or other. A sues B; B defends A’s claim. B also sues A and A defends B’s claim. Essentially each says the same thing in each case. So the ground on which B defends A’s claim is also the ground on which B sues A; and the ground on which A sues B is also the ground on which A defends B’s claim.

[31] Now let me add the further assumption that A is impecunious but B is wealthy. B applies to the courts to order A to provide security for B’s costs of defending A’s claim against him. If the court ordered A to provide that security, A could not provide it. But, quite apart from arguments about whether the court should make an order which would stifle A’s claim, it would not make much sense for the court to make the order. Suppose that the court did make the order and A failed to provide the security. The court would stay A’s claim against B. But B’s claim against A is still on foot, and when B brings it to trial, A can defend it. The court has no power to order a defendant to provide security for costs.

[32] In my example A could, and presumably would, defend B’s claim by advancing essentially the same arguments as those which he, A, wanted to advance in his own claim. It would, in my view, be largely pointless for the court to have ordered A to provide security for the costs of his own claim. Suppose that A’s defence of B’s claim succeeds. In that situation it must be expected that the court would then lift the stay on A’s claim against B so that that claim would proceed after all, notwithstanding A’s original ability to provide security for the costs of it.

[33] In general, the courts recognise that, where there are cross-proceedings, the position is as I have described, and the courts do not order a person in the position of A to provide security for costs of the claim which he is making himself. (See for example, BJ Crabtree (Insulation) System Ltd v GPT Communication Systems Ltd (1990) 59 BLR 43). …”

(c) I respectfully agree with those observations and reasoning.

G.2. The ongoing proceedings

23.Ps refer to and rely on the following ongoing proceedings in which the Alleged Wrongdoings feature:

(a) the present action;

(b) the “Assessment Proceedings”, which I will explain further below; and

(c) HCA 548.

G.2.a. The Assessment Proceedings

24.Arising from their previous appointment as receivers, the Former Receivers have submitted bills for their remuneration and disbursements.

25.For background of the Assessment Proceedings, it is useful to refer to the Decision of G Lam J (as he then was) of 1 April 2021[6] (and in particular §§2-12 thereof) refusing the Former Receivers’ application for interim payment of their remuneration and disbursements (the “Interim Payment Decision”).

26.As observed by G Lam J in the Interim Payment Decision[7], it is common ground that the Former Receivers’ remuneration and disbursements are subject to assessment by the court.

27.Whilst the term “taxation” has been used in reference to the proceedings, and as further explained by G Lam J at §31, having quoted Re Peregrine Investments Holdings Ltd [1998] 2 HKLRD 670 at pp 679B - 680A):

“A central notion in these principles[8], as applied to the present case, is that the Receivers are fiduciaries, and their claim for fees involve an inherent conflict between their own interests and their duty to protect the interests of the owner of the CSI shares, the property put in receivership, against unnecessary expenditure. They must therefore justify the tasks undertaken and their extent by the standard of ‘the care and anxiety of a prudent businessman acting in his own affairs at his own costs and risk’: Peregrine, at pp 682F & 686D-E. The assessment is not simply an exercise of assessing, for example, whether it was reasonable to take 2 hours to read a particular document.

28.The Employee Plaintiffs have been resisting the Former Receivers’ claim in the Assessment Proceedings on the basis of the Alleged Wrongdoings. As they have stated in their List of Objections to the Former Receivers’ Revised Detailed Bill of Costs[9] (“List of Objections”):

“The objections to the [Former] Receivers’ bills and those of their agents are subject to the outcome of HCA 86/2018 in which the employees are suing the [Former] Receivers for breach of duties. Under O62 r31(2) they are not entitled to claim any costs for work carried out found to be in breach of their duties, the learned master is respectfully requested to take into account any adverse findings in HCA 86/2018 eventually held against the [Former] Receivers in the said action.”

29.That certain issues in the present action and the Assessment Proceedings overlap has been acknowledged by the Former Receivers. In a letter dated 27 May 2022 from their legal advisers to those of the Employee Plaintiffs[10], the following were said:

“As regards issue 2, whether [the Former Receivers] performed work outside their receivership appointment (and received remuneration in relation thereto) in capacities other than as Receivers, appears to be one of the subject matters to be determined in HCA 86/2018, of which five of your clients are the plaintiffs. If you consider it is a preliminary issue that needs to be determined before taxation can be commenced (which our clients make no admission), to avoid multiplicity of proceedings, the taxation proceedings should then be stayed pending the determination of HCA 86/2018. If that is the case, our clients will have no objection. That said, in any event, [the Former Receivers] are of the view that whether certain entries in the Revised Bill of Costs are outside the scope of [the Former Receivers’] appointment can and should be resolved during the taxation proceedings (e.g. in the form of an objection). It is unnecessary for the issue to be decided preliminarily.” (Emphasis added.)

30.The overlapping issue acknowledged in that letter is “whether the [Former Receivers] performed work outside their receivership appointment (and received remuneration in relation thereto) in capacities other than as Receivers.” That issue, bearing in mind the Maxwell Principles, would include the issue as to whether the work which the Former Receivers are seeking remuneration was performed in breach of their fiduciary duties.

31.In the course of the hearing, Mr Chau submitted that the Former Receivers are not attacker because it was the Employee Plaintiffs (or the SH plaintiffs as described by G Lam J) who themselves applied to be joined as parties to the Assessment Proceedings. I reject that submission. They are entitled to seek to be heard on the bill what had until then been filed by the Former Receivers on an ex-parte basis. It has all along been the Former Receivers who are seeking to be remunerated.

32.Mr Chau further submits, adopting what may be described as a pro-rata logic, and with reference to what I may refer to as principle (g) in Ai Zhong, that Ps only comprise 5 of the SH plaintiffs, so that their share of the remuneration would in any event be small. I reject also that submission. The List of Objections was filed by the SH plaintiffs. There are more than 2000 of them. Alleged Wrongdoings have been raised by them.

33.I am not here dealing with the Assessment Proceedings. I do not want to complicate what are already complicated sets of proceedings by getting involved in any debate on onus of proof. I prefer to look at the matters practically. Either, based on the Maxwell Principles, the Former Receivers may have to prove that the work which they are seeking to be remunerated was within their receivership appointment, including proving that they were not done in breach of fiduciary relationships; or, the Employee Plaintiffs could raise the Alleged Wrongdoings as defences. Either way, the Alleged Wrongdoings are engaged. Either way, the Former Receivers are the attacker in the Assessment Proceedings, or that if security were ordered against Ps in the present proceedings, they would in effect be ordered to pay security for the defence that they and all other SH plaintiffs would be running in any event. In the latter scenario, Ps would be in the same position as A is in in the example given by Park J at §31 in Anglo Petroleum. Principle (f) in Ai Zhong is also engaged.

34.All the above militates against the grant of any security.

35.What requires further consideration is the scope of the issues. As part of the relief herein, Ps are seeking extensive disclosure of documents – paragraphs (1) and (2) of the Prayer. I have considered the scope of disclosure as ordered by G Lam J in the Assessment Proceedings. In particular, at §40 of the Interim Payment Decision, the learned Judge formed the view that:

“the SH plaintiffs have not, in my opinion, made out a case for disclosure of ‘all underlying books and papers’. I do not consider the assessment exercise to be a reason for requiring the Receivers to hand over to the SH plaintiffs every page of documents generated in the course of the receivership.”

36.However, the action herein and the Assessment Proceedings each involves a disclosure exercise. The difference only is one of scope.

37.I need to bear in mind such difference as one of the circumstance in the overall exercise of my discretion.

G.2.b. HCA 548

38.In HCA 548, the plaintiffs are CSCG, CSCHK, Pioneer, and Shandong Shanshui. Ds herein are 2 of the 18 defendants.

39.I have described the nature of the claim at §52 of the 548 Judgment.

40.Mr Maurellet is correct in submitting that in HCA 548, the Alleged Wrongdoings are also engaged.

41.The “attacker” considerations do not apply in HCA 548. Ds are defendants there. Mr Maurellet acknowledges that. His submissions however are that:

“The existence of HCA 548 simply adds to the point that, in any event, the issues surrounding the [Alleged] Wrongdoings would be ventilated; and, given the fact that the plaintiffs in HCA 548 are the listco CSCG and its Hong Kong subsidiaries, it is simply intrinsically unlikely that any costs it expends on defending the issue would not be recovered.”

42.The question posed therefore is whether it is just to order Ps to pay security for the costs of Ds defending the Alleged Wrongdoings in the present action when Ds would be required to also run the same (and other) defence in HCA 548, and which costs involved it is intrinsically likely could should Ds be successful be recovered from the plaintiffs there.

43.I see the relevance of this factor in the overall exercise of my discretion, which I bear in mind.

H. Ps’ assets within jurisdiction

44.I come back to P’s holding of 16,783 CSI shares.

45.I have considered them. Whilst I have expressed my view that they do not qualify as any substantial assets of fixed and permanent nature, they are of substantive value. On the facts before me, the possibility of they turning into junk stock in the next couple of years is remote.

46.At §§15, 16 and 27 of Zhao/Aff6, he says this:

“15. For completeness, I confirm that:-

(a) No agreement had been reached between ACC and me to extend time for complying with the Shareholdings CP or otherwise prolonging the MOU.

(b) I remain beneficial owners of my CSI Shares which are held by the Nominees, and have not made any attempt to sell them. It should be noted that I am one of the three Nominees.

16. The other 4 Plaintiffs have also confirmed to me and our solicitors, SH, that:-

(a) They also had no agreement with ACC to extend time for complying with the Shareholdings CP or otherwise prolonging the MOUs, and as such their MOUs have also terminated in the same manner as mine.

(b) They remain beneficial owners of their CSI Shares (as held by the Nominees on their behalf), and had not made any attempt to sell them.

…

27. In any event, I am advised and verily believe that, if the Defendants’ concerns are that Ps’ CSI Shares may be sold or pledged (and thus liquidated) without the proceeds being made available for security, this can be addressed by appropriate undertakings. I will leave the Plaintiffs’ legal representatives to make further submissions as are appropriate.”

47.Whilst the other Ps have not filed any affirmation, their confirmations have been confirmed on affirmation by Zhao.

48.At §31 of his written submissions, Mr Maurellet submits that:

“… in any event, to dispel any relevant concerns, Ps are prepared to give an undertaking that Ps would not dispose of, deal with or otherwise diminish the value of the 16,783 CSI shares which they beneficially own and are unencumbered until trial of this Action and the satisfaction of costs orders made against Ps herein (if any), or further Order of this Court.”[11]

49.Despite the criticisms made by Mr Chau concerning the CSI shares held by Ps, they, together with Undertaking Offered, are of some value, which Zhao estimated at about HK$22 million.

I. Reciprocal enforcement

50.In my view, they do not advance Ps’ case.

51.Ps have not revealed that they have any assets for enforcement in the Mainland. Had they intended to deal with the issue, they could have done so in Zhao/Aff6. I do not accept Mr Maurellet’s submissions that it would be unfair for Ds to take the point on the basis that Ds only raised that issue in their reply.

52.In any event, how and when the Civil and Commercial Matters (Reciprocal Enforcement) Ordinance in the Mainland would come into full operation have not been clear. It is speculative for Ds to seek to rely on it.

J. Merits of the Ps’ claim

53.Parties have not focused upon the merits of Ps’ claim for the purpose of this application. In my view, this is not one of those cases that given the strength (or weakness) of the claim, merits come into play.

K. All circumstances considered

54.In my view, and for the above reasons, the existence of the Assessment Proceedings and HCA 548 (the former in particular) strongly militate against granting security. I bear in mind the difference in scope of the discovery exercises herein and in the Assessment Proceedings. In my view, that aspect can adequately be addressed by Ps’ holding of the CSI shares and the giving of the Undertaking Offered in terms as offered. With such an undertaking, I do not find it just to order security against Ps despite the fact that they are not ordinarily resident in Hong Kong.

L. Quantum

55.Given my conclusions above, quantum does not come into play. I say only this. The amount claimed is extraordinarily large. For examples, fees of HK$3,292,280 are said to have been generated in relation to the preparation of the Defence and Further and Better Particulars only, and another sum of HK$4,676,650 is said to be involved for discovery. But quantum being no longer engaged, I will make no further comment.

M. Disposition

56.On condition that an undertaking in terms of the Undertaking Offered be provided in affirmation form within 28 days from the date hereof, I refuse the application for security for costs.

N. Costs

57.I have taken the Undertaking Offered into consideration. The willingness to offer one is stated in Zhao/Aff6. But none has actually been given. On the other hand, I have dismissed the summons. In all the circumstances, I make a costs order nisi that the costs of the application should be Ps’ costs in the cause, with certificate for 2 counsel, to be taxed if not agreed (rather than summary assessment given that they are P’s costs in the cause). Any application shall be made within 14 days from the date hereof by letter to this Court, with the view of it being disposed of on the papers.

Mr José-Antonio Maurellet SC, leading Mr Alexander Tang, instructed by Stephenson Harwood, for the 1^st to 5^th Plaintiffs

Mr Jeffrey Chau, instructed by Dentons Hong Kong LLP, for the 1^st to 2^nd Defendants