Read the full judgment text of CAMP 139/2024 on BabelCite. This Court of Appeal judgment was delivered on 14 August 2024 before Hon Kwan VP and Chow JA.
Security for costs – Court of Appeal – Discretion – Stifling claim – Companies Ordinance – Leave to appeal – Family dispute – Misappropriation allegations – Costs order – Procedural history. The Court of Appeal heard two applications for leave to appeal (CAMP 139 & 140/2024) brought by the 2nd defendant and the 3rd to 5th defendants against a decision by DHCJ Reyes SC refusing to order security for costs in HCA 1664/2020. The defendants sought security for costs of $3.4 million and $1.6 million respectively under section 905 of the Companies Ordinance, Cap 622, arguing that the plaintiffs would be unable to pay costs if they succeeded. The judge had dismissed the applications, reasoning that it was not appropriate to order security given the mutual accusations of misappropriation of company assets between the two factions, and that requiring security might stifle legitimate claims. The defendants advanced four grounds of appeal, asserting errors in the judge's test for stifling claims, failure to consider evidence on funds, improper consideration of the cause of impecuniosity, and incorrect finding regarding the existence of claims or counterclaims. The Court of Appeal held that it would not lightly interfere with a discretionary decision unless there was an error of principle, reliance on irrelevant considerations, or disregard of relevant considerations. The Court found no error in the judge's approach, noting that his mention of the possibility of stifling claims must be read in context of the serious accusations made. The judge was familiar with the background and history of the action. The Court concluded there was no proper basis to interfere with the judge's exercise of discretion and that the intended appeals had no reasonable prospect of success. The applications for leave to appeal were dismissed. The Court further ordered that no party may request reconsideration at an oral hearing and made an order nisi that the defendants pay the plaintiffs' costs of the application.
Legal issues: Exercise of discretion on security for costs
Outcome: Applications for leave to appeal dismissed
Cited by 1 case · Cites 6 cases