Sunchase International Group (China) Ltd and Others v. Vincor Group of Companies (Investment) Ltd and Others
Read the full judgment text of HCA 1178/1995 on BabelCite. This High Court CFI judgment was delivered on 11 February 2004 before Deputy High Court Judge Muttrie.
Civil procedure – security for costs – failure to comply with order for security – dismissal for want of prosecution – inherent jurisdiction of court – interlocutory order – appeal as of right to Court of Final Appeal. The plaintiffs in the original action appealed against the order of Master Woolley dismissing the action for failure to comply with an order for security for costs. The writ had been issued in 1995 and the action resumed in 1999. An order for security for costs of $1,000,000.00 within 21 days was made by Suffiad J on 7 April 2003 and upheld by the Court of Appeal on 23 October 2003. The plaintiffs failed to pay the security into court and on 17 November 2003 applied for the action to be dismissed, which order was made on 18 December 2003. Whether the order of Suffiad J contemplated dismissal for want of prosecution upon non-compliance – held, yes; the order provided that in the event security was not given in the time allowed, all further proceedings would be stayed until security was furnished or the action was dismissed for want of prosecution, and once security was not furnished within the time allowed, it was open to the defendant to apply for dismissal on that basis. Whether the court has inherent jurisdiction to dismiss the action for failure to comply with a section 357 order under the Companies Ordinance – held, yes; following Multi Sky Ltd and Speed Up Holdings, the court has inherent jurisdiction to dismiss where a prescribed time limit for payment of security has been disregarded. Whether the plaintiffs' pending application for leave to appeal to the Court of Final Appeal amounted to prosecution of the action – held, no; section 22(1)(a) of the Hong Kong Court of Final Appeal Ordinance (Cap. 484) requires the judgment to be final, and that requirement applies to both limbs of the subsection. Applying the application test from B & B Construction Ltd, the order for security for costs was interlocutory and did not determine the whole action, so the application for leave to appeal as of right could not succeed. There was no evidence that the plaintiffs would be able to furnish security if given further time, given the relatively modest sum ordered and the dismissal of the Court of Appeal appeal. The court below was entirely right to order dismissal. Appeal dismissed with costs to the defendant, to be taxed if not agreed. A subsequent appeal to the Court of Appeal (CACV64/2004) by the 1st and 3rd Plaintiffs was also dismissed.
Legal issues: Whether failure to furnish security for costs within the time ordered amounts to want of prosecution warranting dismissal · Whether the plaintiffs' pending application for leave to appeal to the Court of Final Appeal constitutes prosecution of the action · Inherent jurisdiction to dismiss action for non-compliance with security for costs order
Outcome: Appeal against the Master's order dismissing the action for want of prosecution dismissed; costs to the defendants, to be taxed if not agreed.
Cited by 6 cases · Cites 2 cases
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HCA001178/1995 HCA1178/1995 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO.1178 OF 1995 --------------------
(By Original Action) -------------------- AND BETWEEN
(By Counterclaim) -------------------- Coram: Deputy High Court Judge Muttrie in Chambers Date of Hearing: 11 February 2004 Date of Judgment: 11 February 2004 ----------------------------------------------------- REASONS FOR JUDGMENT ----------------------------------------------------- 1.The plaintiffs (by Original Action) appealed against the order of Master Woolley made on 18 December 2003 that this action be dismissed. On 11 February 2004 I dismissed the appeal with costs to the defendant, to be taxed if not agreed. I now give reasons. 2.The background is as follows. The Writ was issued in 1995. In 1996 the action went to sleep. It started moving again in 1999. In March 2001 the defendants applied for an order for security for costs against the plaintiffs. Master Levy dismissed the application. It was appealed to Suffiad J who, on 7 April 2003, set aside the Master's order and ordered that the plaintiffs furnish security for the defendant's costs by paying $1,000,000.00 into court within 21 days. The plaintiffs appealed to the Court of Appeal but on 23 October 2003 the appeal was dismissed. The plaintiffs did not make any payment into court. On 17 November 2003 the plaintiffs applied for the action to be dismissed on the ground of failure to comply with the order for security for costs. On 18 December 2003 the Master made the order appealed against. In the meantime, on 19 November 2003 they applied for leave to appeal to the Court of Final Appeal against the decision of the Court of Appeal. That application is to be heard in March 2004. 3.The plaintiffs say that the action should not have been dismissed. They rely on the 3rd paragraph of the order of Suffiad J which reads :
4.Their argument is that the order did not specify dismissal for non-compliance. As all further proceedings would be stayed for non-compliance, prosecution is impossible except by appeal. The defendants are prosecuting the action by applying for leave to appeal to the Court of Final Appeal. Therefore the action should not have been dismissed. 5.It is also argued that for an action to be dismissed for want of prosecution, serious delay must be shown. There has been no such serious delay here. The delay in giving security is only 10 months, and that delay is in part explained by the appeal to the Court of Appeal. 6.There is no evidence before the court that the defendants are likely to be able, if given further time, to give security. Counsel says that they may be able to do so if their commercial circumstances improve. 7.It would have been open to the court to specify a time within which security is to be given, stay all further proceedings until it is given, and provide for the action to be dismissed without further order if security is not given. Then, if security is not given, the action may be dismissed without further application. See the passage by Millet LJ in Clive Richard Brooks & Co. Ltd v. Baynard, CA, reported in The Times, 31 March 1998. 8.The order of Suffiad J appears to contemplate dismissal for want of prosecution though it does not specifically provide for it to be automatic. It provides that in the event that security is not given in the time allowed, i.e. 21 days, the action be stayed until security is furnished or it is dismissed for want of prosecution. It seems to me to follow that once security is not furnished within the time allowed, there is want of prosecution and it is open to the defendant to apply for dismissal on that basis. 9.In any event the court, though it has no statutory power under the relevant section of the Companies Ordinance to dismiss an action for failure to comply with an order under section 357 to give security for costs, has the inherent power to do so. See Multi Sky Ltd v. Hong Kong Chinese Insurance Co. Ltd & Anor [1994] 1 HKC 108, following Speed Up Holdings v. Gough & Co. (Handly) Ltd [1986] FSR 330. 10.In Multi Sky Ltd Kaplan J, in July 1993, ordered security for costs to be given within 21 days and that the Multi Sky Ltd's counterclaim be stayed unless and until security was provided. The order did not mention dismissal for want of prosecution. Security was not given. The plaintiff in the action applied for dismissal of the counterclaim. Mayo J heard the application in September 1993. He accepted that he should have regard to the general principles applicable to a strike-out situation rather than "adopting what amounts to being an automatic strike-out by virtue of non-compliance". He allowed further time, and on appeal the Court of Appeal also allowed further time. 11.In Speed Up Holdings, Deputy Judge Evans-Lombe, QC considered the circumstances under which the court could apply its inherent jurisdiction to dismiss an action in which a plaintiff had been ordered to give security for costs under the relevant section of the Companies Act but had failed to do so. He took the view that there were three principal areas in which the inherent jurisdiction could be applied; the first being where the action was not being pursued with due diligence; the second where the court was satisfied that there was no reasonable prospect that security would be given, and the third was where - as here, but not in the case before him - the court had prescribed a time limit within which the security was to be paid, but that time limit had been disregarded by non-payment. 12.The latter circumstance of course applies here. It is also the case that security has not been given, notwithstanding the fact that Suffiad J, on the materials before him, ordered a relatively small sum to be paid, and the fact that the appeal to the Court of Appeal was dismissed. As I have indicated, there is no evidence to suggest that if further time were allowed the plaintiffs might be able to find the money. 13.There remains the question of the application for leave to appeal. Does it amount to prosecution of the action? I note that the only ground put forward in the plaintiffs' Notice of Motion is that Suffiad J's order involves the question of a civil right amounting to the value of $1,000,000.00 or more, and accordingly the plaintiffs have an appeal as of right to the Court of Final Appeal under section 22 (1)(a) of the Hong Kong Court of Final Appeal Ordinance, Cap.484. That subsection provides :
14.But this section only applies to a final judgment. See Re Tian Sheng No. 8, CACV 103 of 1999. In deciding whether a judgment is final, the Court of Final Appeal will apply the "application test"; i.e., whether or not the order made by the Court of Appeal is a final or interlocutory order. See B & B Construction Ltd v. Sun Alliance and London Insurance Plc [2001] 1 HKLRD. Per Chan PJ at 4C :
15.As I understand the argument for the plaintiffs, the requirement for the order to be final only applies "where the matter in dispute on the appeal amounts to or is of the value of $1,000,000.00 or more" but does not apply "where the appeal involves, directly or indirectly, some claim or question to or respecting property or some civil right amounting to or of the value of $1,000,000.00 or more". With respect, it seems to me that this cannot be right. On any sensible construction the requirement that the order be final applies in both cases. 16.It follows that the plaintiffs' application for leave to appeal as of right to the Court of Final Appeal cannot succeed. It cannot therefore be regarded as prosecution of the action. 17.It seems to me therefore that it was open to the Master and it is open to me to regard the failure to give security within the time limit as amounting to want of prosecution. The fact that there is on foot an application for leave to appeal to the Court of Final Appeal makes no difference. Nor do I see that it makes any difference that the ground for dismissal in the summons is expressed as being failure to give security rather than want of prosecution. It amounts to the same thing. 18.The court has jurisdiction to order dismissal. Looking at the surrounding facts and circumstances so as to consider whether in the discretion of the court further time should be allowed, it appears that there is nothing to be gained by that. There is no evidence of any reasonable prospect of security being given. 19.It therefore appeared to me that the Master was entirely right to order that the action be dismissed.
Representation: Mr S.C. Sui, , instructed by Messrs Johnson, Stokes & Master, for the 1st, 2nd and 3rd Plaintiffs (By Original action) and Mr P. Lam, instructed by Messrs Deacons, for the 1st, 2nd and 3rd Plaintiffs (By Counterclaim) and the 1st, 2nd and 3rd Defendants (By Original action) Remarks: Appeal to Court of Appeal by 1st and 3rd Plaintiffs. Appeal dismissed. Please refer to the appeal judgment of CACV64/2004. |
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