Leader Screws Manufacturing Company Ltd v. Huang Shunkui

CACV 418/2022, [2023] HKCA 1193

on appeal from [2021] HKCFI 3664

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 418 OF 2022

(ON APPEAL FROM HCA 2067/2019)

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BETWEEN

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D E C I S I O N

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

1.This is an application for security for costs by the plaintiff against the defendant. Having considered the documents before us, we came to the view that the application could be dealt with on paper without an oral hearing.

Procedural background

2.By its Writ (“the Writ”) and Statement of Claim (“the SOC”) in HCA 2067/2019, respectively dated 8 November and 9 December 2019, the plaintiff claimed damages of nearly HK$9,000,000.00 against the defendant for losses arising from fraudulent appropriation of company funds by the defendant, who was formerly employed as the plaintiff’s senior accounting clerk.  On the same date as the Writ was issued, Ng J granted the plaintiff a Mareva injunction (subsequently continued by K Yeung J) against the defendant prohibiting her from disposing of her assets up to the amount of about HK$8,500,000.00.  Ng J’s order also required the defendant to disclose (within 3 days of service of the order) all her assets in Hong Kong of an individual value of HK$20,000.00 or more.

3.On 13 November 2019, the defendant filed an acknowledgment of service indicating that she did not intend to defend the plaintiff’s claims, whereupon the plaintiff applied for default judgment and for an extension of the Mareva injunction post-judgment.  When the application came on for hearing in June 2020, the defendant belatedly indicated an intention to defend the claims made against her.  DHCJ Paul Lam SC, having taken into account the fact that the defendant was unrepresented, allowed her to apply for leave to file a defence. This the defendant did on 17 July 2020, annexing a draft defence to her summons.  The application was heard by Au-Yeung J (“the Judge”) on 9 October 2020 at the same time as the plaintiff’s applications for default judgment and extension of the Mareva injunction.

4.On 18 January 2021, the Judge handed down a judgment (“the Judgment”) refusing to grant leave to the defendant to file a defence, and entering default judgment in favour of the plaintiff pursuant to which the defendant was ordered to pay to the plaintiff the sum of HK$9,037,474.68 (“the Judgment Sum”) with costs, plus interest at the rate of prime +1% compounded yearly.  Accrued interest as at 9 October 2020 was assessed to be about HK$5.6 million.  The Judge further ordered that the Mareva injunction extended for a further 6 months and varied to increase the sum frozen to about HK$14,600,000.00 odd to include the accrued interest.

5.Thereafter, on 12 May 2021, DHCJ Maurellet SC made a garnishee order absolute, ordering the garnishee bank to pay the plaintiff the sum of HK$15,005,091.81 (being the Judgment Sum plus interest as at 22 February 2021), and on 9 July 2021, the Judge continued the Mareva injunction for a further 9 months, until 18 April 2022.  On 24 September 2021, the Judge appointed joint and several receivers on 24 September 2021 to receive units and shares held for the benefit of the defendant in her investment accounts maintained with various securities management firms (“the Receivers Appointment Order”).

6.By summonses filed on 10 August and 27 September 2021, the defendant applied for (i) an extension of time to appeal against the Judgment; (ii) the Mareva injunction to be lifted; and (iii) leave to appeal against the Receivers Appointment Order.  Both summonses were dismissed by the Judge by her decision dated 6 December 2021 (“the Extension of Time Decision”).

7.On 14 April 2022, DHCJ Winnie Tsui ordered that the Mareva injunction be continued for a further 15 months, until 18 July 2023.

8.The defendant then applied unsuccessfully to the Judge for a stay of execution of the Judgment pending appeal, the application being dismissed by the Judge’s decision dated 12 August 2022.

9.Thereafter, on 10 October 2022 the defendant applied to this court (in CAMP 553/2021) for “leave to appeal against [the Extension of Time Decision]” (by which the Judge had dismissed her application for an extension of time to appeal against the Judgment).  On 20 October 2022, after a hearing at which the defendant was represented by counsel, this court (Au JA and Lisa Wong J) made an order (“the CAMP Order”), granting (i) an extension of time to the defendant to appeal against “the Extension of Time Decision” (see further below); and (ii) leave for the defendant to file a Notice of Appeal (as per the draft attached to the defendant’s Summons) within 7 days of the date of the order.  This led to the present appeal.

10.On 16 June 2023, upon a joint application by the parties by way of consent summons, the Judge ordered that the Mareva injunction be continued to the 42^nd day after the substantive determination of this appeal.

The factual background and the decisions below

11.The general background to the parties’ disputes and their respective cases are set out in detail at [20] to [42] of the Judgment.  It can be summarised as follows.

12.The plaintiff manufactures and distributes metalwork products in Hong Kong and Mainland China.  The defendant was an employee of the plaintiff with responsibility for accounting matters relating to the business. The plaintiff alleged that the defendant, both while employed as a senior accounting clerk and after her resignation from the plaintiff, fraudulently misappropriated company funds in excess of HK$9,000,000.00 by, inter alia, doctoring the dates of 5 invoices issued to the plaintiff by its suppliers to create the impression that such invoices were still outstanding (“the Supplier Fraud”) and diversion of funds due to customers of the plaintiff to her personal bank accounts (“the Customer Fraud”).  As regards the Supplier Fraud, the net misappropriated sum (as the defendant apparently used her own funds to settle one of the invoices) was said to be HK$458,023.80 (“the Supplier Fraud Sum”). 

13.The plaintiff relies on a memorandum dated 31 January 2019 both in English and Chinese, signed by the defendant (“the Memorandum”), by which the defendant admitted dishonest and fraudulent conduct “on [her] accounting work” and that she had embezzled the Supplier Fraud Sum from the plaintiff’s bank account between February and November 2018.  The Memorandum further stated that the plaintiff had suffered a “huge loss”, that what the defendant did was “considered a criminal offence”, and that the defendant “decided that [she] should resign to take the blame for misconduct with immediate effect”.

14.The defendant’s purported defence (as contained in her first draft defence put before the Judge) in respect of the Supplier Fraud was essentially that she was unaware of the consequence or significance of signing of the Memorandum (i.e. that it amounted to an admission of fraudulent conduct), that the practice of the company was that she first would use her own funds to pay the suppliers after which the company would reimburse her, and (alternatively) that the Supplier Fraud Sum was purportedly used to set off a loan of RMB500,000.00 to a customer named Au (see Judgment at [27]-[32]).  As regards the Customer Fraud, she claimed that the misappropriated total sum of around HK$8,500,000.00 million constituted processing fees in the Mainland, around HK$1,900,000.00 of which was transferred to her personal bank account by customers of the plaintiff and then wired to the bank account of one of the plaintiff’s directors, Tsoi (see Judgment at [37]-[38]).

15.The Judge found (i) there was evidence showing that the defendant doctored the relevant invoices in relation to the Supplier Fraud, having regard to the defendant’s express acknowledgments in the Memorandum; and (ii) the fraud was “direct”, in that cheques had been doctored and that funds originally meant for the plaintiff’s bank accounts were diverted by the defendant to her own accounts (see Judgment at [25]).

16.The Judge considered the parties’ respective cases and the evidence in some detail before concluding that the defendant’s purported defence against both the Supplier Fraud and the Customer Fraud was unarguable (see Judgment at [36] & [40]).

The hearing before this court on 20 October 2022 and the CAMP Order

17.It appears from the recordings of the hearing before this court in CAMP 553/2021 on 20 October 2022 (where both parties were represented by counsel), that this court pointed out that the real issue was whether an extension of time should be given to the defendant to appeal against the Judge’s “main” judgment, namely her refusal of leave to enable the defendant to file her defence out of time, which led to the entering of the Judgment in favour of the plaintiff.

18.Counsel for the defendant (Mr Jason Wong, and with him Mr Esmond Wong) accepted that the draft defence originally put before the Judge by the defendant (who was at the time unrepresented) was inadequate, but submitted that she should be given an opportunity to file a properly formulated defence, as contained in the draft defence and counterclaim.

19.Towards the end of the hearing, counsel for the plaintiff confirmed that the market value of the landed property which was (and remains) subject to the Mareva injunction was around HK$7,000,000.00, and that the plaintiff had already received a sum of around HK$2,000,000.00 from shares belonging to the defendant which had been obtained under the Receivers Appointment Order.  The plaintiff contended that as a result of interest accruing on the Judgment, the outstanding judgment sum had increased to about HK$15,000,000.00.

20.As the plaintiff was protected by the Mareva injunction and the funds recovered by the Receivers to the total extent of about HK$9,000,000.00, the court declined to impose any payment-in condition when granting leave to appeal out of time to the defendant.

The subject of [2] of the CAMP Order

21.Although [2] of the CAMP Order is expressed as granting an extension of time to the defendant to appeal against the Extension of Time Decision, it is clear that the defendant’s application was in substance been for an extension of time to appeal against the Judgment.  This appears from:

(a)  the 2^nd Affirmation of Huang Shunkui (“D’s CAMP Aff”) filed on 10 October 2022 in support of her application extension of time to appeal, in which the defendant (having stated that she sought an extension of time to appeal against the Extension of Time Decision) clarified at [7] that the “substantive appeal” was “against the default judgment” (i.e. the Judgment);

(b)  the Notice of Appeal (filed on 24 October 2022 pursuant to leave granted by [3] of the CAMP Order) (“the NoA”), in which although the decision sought to be appealed against was stated to be the Extension of Time Decision, the order sought on appeal from the appeal was “an extension of time [to] be granted to [her] to appeal against the [Judgment]” (at p.2);

(c)  Ground 3 of the grounds of appeal advanced in the NoA, by which the defendant contends that the newly drafted defence and counterclaim (which had not been not placed before the Judge in the court below) “shows clearly arguable issues” which were “largely presented by the defendant before the Judge” (when she was at the time unrepresented) but in a “disorganised manner”.

22.Further, as we have noted, it was clear from the conduct of the hearing and the parties’ submissions on 20 October 2022 that the intended appeal for which an extension of time was being sought by the defendant was the Judgment as opposed to the Extension of Time Decision.  As was explained in Tang Chai On v Tang Sing Ki [2016] 5 HKLRD 104, while it is technically possible to appeal against a decision of the court below in refusing an extension of time (i.e. the Extension of Time Decision), it is generally not appropriate to do so as this is not cost effective, and such applications will normally be treated as being appeals against the substantive decision in the court below.

23.We are therefore satisfied that the wording of [2] of the CAMP Order was an accidental slip, and that the manifest intention of the court, namely to grant an extension of time to the defendant to appeal against the Judgment (as opposed to the Extension of Time Decision) was not correctly reflected in the CAMP Order.  We would therefore order (pursuant to our inherent jurisdiction) that the [2] of the CAMP Order be amended as follows:

“2. Extension of time be granted to the defendant to appeal against the decision of Au-Yeung J dated 18 January 2021.”

(see e.g. Skink Ltd (in liquidation) & Another v Comtowell Ltd & Another [1998] 1 HKLRD 542; Lo Yuen Chong v IWS Environmental Technologies Limited [2021] HKCA 89.

The application for security for costs

24.The plaintiff filed its summons (“the Summons”) seeking security for costs of the appeal in the sum of HK$750,000 on 30 December 2022.

25.The evidence for this application consists of the 2^nd Affirmation of Kwong Tsz Choi dated 30 December 2022 (“Kwong’s 2^nd”) for the plaintiff in support of the Summons, the 2^nd Affirmation of Huang Shunkui dated 31 January 2023 filed by the defendant in opposition to it, and the 3^rd Affirmation of Kwong Tsz Choi dated 7 February 2023 (“Kwong 3^rd”) in reply. 

26.Prior to that, pursuant to [4] and [5] of the CAMP Order, the plaintiff and the defendant had filed affirmations on 4 November and 23 December 2022 respectively (“Kwong’s 1^st” and “Huang’s 1^st”) setting out their positions on the issue of whether conditions should be imposed on the defendant in filing the Draft D&C in the event that she succeeds in the appeal proper.

27.Written submissions for the plaintiff were lodged by Mr Tommy Cheung on 21 February 2023 (“P’s Skel”), followed by the written submissions of Mr Jason Wong for the defendant dated 7 March 2023, and reply submissions by Mr Jenkin Suen SC for the plaintiff on 14 March 2023 (“P’s Reply”).

Legal principles

28.The approach to an application for security for the costs of an appeal is clearly stated in Chung Kau v Hong Kong Housing Authority & Others [2004] 2 HKLRD 650 at [14]:

“The power of the Court of Appeal to order security for costs in an appeal derives from RHC Order 59 rule 10(5). This Rule reads:

‘The Court of Appeal may, in special circumstances, order that such security shall be given for the costs of an appeal as may be just.’

The relevant principles, in particular the treatment of impecuniosity as a special circumstance are summarized in Hong Kong Civil Procedure 2004 Volume 1 at paragraphs 59/10/28 - 59/10/29. In this context, however, I would emphasize the following:-

(1) The fact that an appellant is impecunious does not lead automatically to an order that security for costs must be provided. The court is entitled to consider other relevant factors such as the strength of the appeal to determine whether or not it would be just to order that security for costs be provided.

(2) That said, as a matter of practice, once an applicant for security can demonstrate that impecuniosity (or some other factor such as difficulty or expense in enforcing a costs order) exists, while the court retains an overall discretion whether or not to make the order, it would then generally be up to the party resisting the application for security to demonstrate countervailing factors which would militate against such an order being made. A common countervailing factor to resist applications for security are the merits of an appeal.

(3) On a consideration of the merits of the appeal, while a detailed examination is not required (or desirable, even if possible on the materials before the court at this stage), the court should form some sort of preliminary, even instinctive, view. Where the merits appear to go strongly one way or the other, this may by itself be a decisive factor. Thus, an appeal which is very strong would often be a very good reason not to order security. The converse of course also applies. A hopeless appeal may even by itself justify an order for security. However, if the court takes the view that the appeal could really go either way, then generally it will look to the existence of any other factors to tilt the balance, in the absence of which security will be ordered. This is of course on the assumption that a factor such as impecuniosity has already been demonstrated.

(4)  As I have said above, the overriding consideration for the court is to consider, as the rule requires, whether ‘special’ (not exceptional) circumstances exist making it ‘just’ to order security.”

Discussion

29.As can be seen from the principles set out above, it is first for the plaintiff (as the applicant for security) to demonstrate impecuniosity on the part of the defendant, or some other factor or special circumstance to justify the grant of security for costs.  The overriding consideration for this court is whether special circumstances exist which render it just to order security.

30.The plaintiff’s case, as stated in Kwong’s 2^nd (at [4]) (see also Kwong’s 3^rd at [14]-[15]; Kwong’s 1^st at [10]), is that the defendant is impecunious and by reason of her general uncooperative attitude, and the fact that part of her assets (a landed property registered under her name in the Mainland, “the PRC Property”) are located out of jurisdiction, it would be difficult or expensive for the plaintiff to enforce any costs orders that it might obtain in respect of the appeal.

31.The main points made in the submissions of Mr Cheung in P’s Skel and Mr Suen SC in P’s Reply are:

(1)  the purpose of the grant of security for costs of an appeal is to provide additional protection to a respondent on appeal, in the event that the appellant is unsuccessful and is liable to the respondent for additional costs (see P’s Skel at [2]);

(2)  the defendant is impecunious because after her known assets, such as her bank balances and landed properties, are taken into account she (as she herself has deposed in Huang’s 1^st at [21]-[23]), was “completely out of funds” and depended on her ex-husband and parents financially for basic living expenses and litigation costs (P’s Skel at [12]);

(3)  the defendant’s ownership of the PRC Property does not militate against the grant of security, as there are considerable difficulties in enforcing a Hong Kong costs order against Mainland assets (P’s Skel at [13]);

(4)  the Judgment Sum (or, as the plaintiff contends, the Judgment Sum plus interest which amounts to around HK$15,000,000.00) remains partly unsatisfied, leading to the inference of impecuniosity (P’s Skel at [14]);

(5)  the defendant does not have strong grounds of appeal (P’s Skel at [17]-[21]), and the mere fact that leave to appeal out of time was granted to the defendant by this court does not mean that the defendant has a strong appeal (P’s Reply at [6]);

(6)  the defendant has disregarded court orders (e.g. by failing to make disclosures as required by the ancillary orders to the Mareva injunction) and had hindered the plaintiff’s enforcement efforts (see P’s Skel at [6]; P’s Reply at [12]).

32.The defendant’s position according to the matters stated in Huang’s 2^nd and Huang’s 1^st is that the plaintiff, by virtue of the existing measures taken against the defendant’s assets (e.g. the Mareva injunction), is already sufficiently protected against the risk of costs of the appeal.

33.Mr Wong also submits that the defendant is not impecunious, by reason that she has substantial assets within the jurisdiction, as well as in the Mainland (D’s Skel at [8]-[10]).  He referred us to Ming Hsieh v Xu Zhe & ors, CACV 189/2015 (unrep., 8 December 2015) in support of his submission that notwithstanding that the defendant’s known assets are subject to the Mareva injunction (and partly realised by the plaintiff), if the value of such assets are sufficient to cover the costs of an unsuccessful appeal, no security for costs should be ordered (D’s Skel at [11]).  He submits that in any event, the defendant has a “strongly arguable case” in respect of the appeal proper (D’s Skel at [18]-[20]).

34.According to the plaintiff’s evidence on the issue of impecuniosity, the total judgment debt amounts to around HK$15,000,000.00 (see [8] of Kwong’s 2^nd), but this has been partially satisfied by the sum obtained from garnishee order(s) and the sum realised by the receivers appointed under the Receivers Appointment Order (respectively HK$224,712.75 and HK$2,971,889.25 - see [19]-[20] of Kwong’s 2^nd).  Thus, the total sum realised and in the hands of the plaintiff amounts to HK$3,196,602.00.

35.Apart from the above, the plaintiff is in possession of charging orders absolute (obtained following the Mareva injunction) over two Hong Kong landed properties owned by the defendant, which according to valuations conducted in November 2021, had a total “present value for sale” of HK$7,760,000.00 (see Kwong’s 2^nd at [21]-[24]). 

36.Further, the plaintiff has obtained an asset preservation order over the PRC Property (see Kwong’s 2^nd at [28(d)]), although no valuation was obtained in respect of this property.

37.The plaintiff’s position is therefore that the total sum realised including the funds frozen by the Mareva injunction and asset preservation order is around HK$11,200,000.00 which still “falls far short” of the sum of HK$15,000,000.00 and outstanding costs orders of about HK$400,000.00 (see [16] and [25] of Kwong’s 2^nd).

38.Mr Suen also submitted that Ming Hsieh was distinguishable as it related to an interlocutory appeal before judgment had been entered, whereas the plaintiff here had obtained judgment, and already had made a partial recovery through execution (in respect of the sums obtained by the garnishee order(s) and through the receivers) and also had charging orders over the Hong Kong properties, so that there was not likely to be any value remaining in those properties.  However, with respect, we are unable to agree with his attempt to distinguish Ming Hsieh.

39.Notwithstanding that Ming Hsieh concerned an interlocutory appeal where judgment in respect of the main claim had not yet been entered in favour of the applicant for security for costs, this court (Lam VP, as he then was, and Barma JA) set out the following as a matter of general principle (at [6] of Ming Hsieh):

“A Mareva injunction prevents a defendant from dissipating his assets so as to deprive a plaintiff of the benefit of the judgment he expects to obtain, but does not operate to provide the plaintiff with security over the assets which are subject to the injunction. Those assets remain the property of the defendant until such time as they are taken in execution, whether by the plaintiff or some other claimant, or are otherwise disposed of by the defendant if he is given permission by the court to do so, notwithstanding the injunction – for example, by using some of the assets to fund his defence of the proceedings, or to meet his pre-existing liabilities. Until that happens, the assets remain available to satisfy any order for costs that the plaintiff may obtain, so that it cannot be said that the defendant is unable to meet any such costs order.” (emphasis added)

40.Notwithstanding that above dicta were given in respect of pre-judgment Mareva injunctions, there is no reason why the principle that the assets of the defendant subject to the injunction remain the property of the defendant until they are taken in execution, so as to remain available to satisfy any costs orders in favour of the plaintiff, is not equally applicable to post-judgment Mareva injunctions.

41.This is made clear by the court’s further comments at [8]of Ming Hsieh:

“Another way of looking at the matter is this: the situation is similar to that where a plaintiff is respondent to an interlocutory appeal by a defendant, who has assets within the jurisdiction that are less than the amount of the claim against him, which has not yet been determined. Such a plaintiff could not seek security for the costs of the appeal on the basis that his claim exceeded the defendant’s known assets. If those assets were sufficient to cover the costs of an unsuccessful appeal, no security would be ordered. Whether or not there would ultimately be sufficient assets to pay the plaintiff’s claim if it should ultimately be successful would not be a relevant factor. The existence of a Mareva injunction over those assets makes no difference, as it does not affect the [defendant’s] ownership of the assets.” (emphasis added)

42.As can be seen from these passages, whether the known assets of the defendant are sufficient to satisfy the judgment debt owed to the plaintiff (in the event that the defendant ultimately fails in his defence against the plaintiff’s claim) after the deduction of costs of the appeal (i.e. whether there would ultimately be enough assets to pay the plaintiff’s claim) is not a relevant factor to be considered in the plaintiff’s application for security for costs of the appeal.  The plaintiff will not be able to obtain security for costs if the known assets of the defendant are sufficient to cover the plaintiff’s costs of the appeal.  A Mareva injunction does not affect the defendant’s ownership of the assets, and provides the plaintiff with no security for his claim, as they may still be used to meet debts and other liabilities pending the resolution of the claim. 

43.In this case, the defendant’s known assets still in her ownership comprise the landed properties in Hong Kong and on the Mainland, which although subject to the Mareva injunction, remain her property until such time as the plaintiff takes them in execution.  Although there is a charging order over those properties, this gives the plaintiff no proprietary interest in them, and they remain the property of the defendant (see Sino Billion Ltd v Lam Chok Wai [2003] 2 HKC 167 at [12]).  On the evidence, the value of the properties is equal to approximately ten times the amount of security for costs currently sought by the plaintiff. Even if that value may have fallen since the valuation was obtained, it is still many times that of the amount of security sought.

44.Mr Suen SC submits that the default judgment entered by the Judge against the defendant is “valid and fully enforceable” (at [9] of P’s Reply) and no stay of execution of the Judgment has been granted (at [7] of P’s Skel).  He further says that the defendant has taken no steps to satisfy the Judgment (at [10(a)(ii)] of P’s Reply).  While this may be true, as stated above, in determining an application for security for costs pending appeal, the court has firmly in mind the overriding principle of whether it is just in the circumstances to grant such security on the facts of any given case.  Bearing in mind that the proposed appeal, for which an extension of leave has been given, and which must therefore be taken to be at least reasonably arguable concerns whether or not the default judgment should be set aside, it seems to us that the situation is one in which it would not be just to have regard to these matters.

45.As the defendant had deposed in her affirmations, her known assets in Hong Kong have been realised and frozen by the plaintiff’s enforcement measures, and the plaintiff has adduced no contrary evidence to suggest that the defendant has dissipated or concealed any other assets.  Indeed, the available evidence before this court suggests that the defendant simply has no means to pay the Judgment Sum to the plaintiff, even if she wished to.  In these circumstances, it might also be thought that the making of an order for security would be likely to stifle what is an apparently arguable appeal. 

46.The plaintiff is also protected in respect of the costs of the appeal as the amount frozen by the Mareva injunction is more than enough to meet the plaintiff’s estimated costs of the appeal and the injunction will remain in force for a reasonable period of time after the determination of the appeal, thus allowing time for the plaintiff to take steps to recover such costs (if the plaintiff is successful in the appeal).

47.We are therefore of the view that having regard to the known assets of the defendant which remain under her ownership, the plaintiff has failed to demonstrate impecuniosity on the part of the defendant.

48.The plaintiff also contended that the defendant’s uncooperative conduct in the proceedings in general and her failure to comply with the court’s disclosure orders are relevant factors to be considered in this application.  The plaintiff says that the defendant’s conduct, coupled with the fact that apart from the secured assets, the defendant only holds the PRC Property (which is located in the Mainland), would render it difficult or expensive to enforce any costs order. 

49.For the following reasons, we do not consider these factors as special circumstances or reasons which would render the grant of security just on the facts of this case:

(1)  the defendant is not impecunious, as we have concluded above – the Hong Kong properties are more than sufficient to cover the plaintiff’s likely costs of the appeal;

(2)  although it appears that the defendant had failed to, inter alia, comply with the court’s disclosure orders (made with the Mareva injunction), the defendant was unrepresented at the time, and although this does not excuse her from non-compliance, her recent conduct (no doubt with the benefit of legal advice) seems to us to show that she is capable of reasonable cooperation (as shown by her consent to the continuation of the Mareva injunction until after the determination of the appeal proper);

(3)  notwithstanding that realisation of the PRC Property may be problematic, the PRC Property is not considered relevant given our conclusion on impecuniosity above.

50.We are therefore of the view that the plaintiff has failed to establish the special circumstances necessary to render it just for this court to grant security for costs of the appeal.

51.In the circumstances, it is unnecessary for us to form a preliminary view on the merits of the appeal. 

Disposition and costs

52.For the above reasons, the plaintiff’s Summons filed on 30 December 2022 is dismissed.

53.Costs should follow the event.  As the defendant did not lodge a statement of costs with the court, we make an order nisi that the defendant’s costs of this application be paid by the plaintiff, to be taxed if not agreed.

Mr Jenkin Suen SC and Mr Tommy Cheung, instructed by Lau & Co, Solicitors, for the plaintiff

Mr Jason Wong and Mr Esmond Wong, instructed by Eddie Lee & Company, for the defendant