Bank of China (Hong Kong) Ltd v. Wenloy Ltd and Another

CACV 427/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL No.427 of 2006

(ON APPEAL FROM HCA No.997 of 2004)

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BETWEEN:

Before: Hon. Yuen JA and Chu J in Court

Date of hearing and decision: 27 June 2007

Date of Reasons for Decision: 29 June 2007

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REASONS FOR DECISION

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Hon.  Yuen JA:

1.This is an appeal by the 2^nd Defendant from Rogers V-P’s order made on 28 May 2007 that he give security for costs in the sum of $155,000 for his appeal against Deputy Judge Muttrie’s judgment given on 21 November 2006.  On 24 April 2006 Master Hui had given summary judgment against the 2^nd Defendant and the deputy judge upheld that order. 

2.At the conclusion of the hearing before us, we dismissed the appeal with costs.  My reasons appear below. 

Principles

3.The Vice-President’s order was given in the exercise of his discretion.  It is well-established that an appellate court should not interfere with the exercise of a judge’s discretion unless it is satisfied that the judge has erred in law or in principle, or if he has taken into account some matter which he should not have taken into account, or has left out of account some matter which he should have taken into account, or if the decision was so plainly wrong that it must have been reached by a faulty assessment of the weights of the different factors which have to be taken into account. 

Rogers V-P’s decision

4.It is clear from the Vice-President’s decision (para. 2) that he was well aware of the principles of law governing an application for security for costs and it has not been suggested by the 2^nd Defendant that the Vice-President has misapprehended any material facts.   

5.The Vice-President found that the 2^nd Defendant’s impecuniosity had been established because a statutory demand for a judgment debt was outstanding. 

6.The Vice-President was also of the view that the 2^nd Defendant had failed to demonstrate that he had sufficient merits in the appeal to make it appropriate not to order security for costs.

7.As a matter of completeness I should add that since the Vice-President’s order, the 2^nd Defendant has filed an affirmation on 5 June 2007 but no new facts have been disclosed.

Discussion

8.Is there anything before us to show that the Vice-President was wrong in coming to those views?

9.As far as impecuniosity is concerned, there is still extant a statutory demand for the judgment debt in the sum of over $2.3 million.  That is a fact that the 2^nd Defendant cannot ignore even though he has applied to set it aside.  It is noted that in his application to set aside the statutory demand, the 2nd Defendant has not suggested that he can pay off the judgment debt - his only ground is that he intends to appeal against the judgment.  The unsatisfied statutory demand, and the lack of any evidence from the 2^nd Defendant to show that he has assets to satisfy it, justifies the Vice-President’s view that the 2^nd Defendant is impecunious.

10.As far as the merits of the appeal are concerned, I have read Deputy Judge Muttrie’s judgment.  Before us the 2^nd Defendant relied heavily on the majority judgment in CACV 120/2005 but that was decided on the individual facts of that case.  In the present case, the 2^nd Defendant was a practising solicitor at the material times so it is not surprising that the deputy judge did not accept his allegations that he did not understand the terms of the guarantee, etc.  As far as the alleged settlement agreement was concerned, the deputy judge took into account the fact that it was not reduced to writing even though the 2^nd Defendant was a solicitor.  Further the alleged settlement agreement was inconsistent with contemporaneous documents and the deputy judge also found inconsistencies between the pleadings and the 2^nd Defendant’s affirmation.  Even without taking other issues such as consideration into account, I do not think the Vice-President’s assessment of the lack of sufficient merits in the appeal from the deputy judge’s  judgment can be gainsaid.  

Order

11.The 2^nd Defendant having failed to show any grounds for disturbing the Vice-President’s exercise of his discretion, this appeal was dismissed with costs (the parties having agreed that the costs should follow the event).

Hon. Chu J:

12.I agree.

Mr MC Law instructed by Tsang Chan & Wong  for the Plaintiff (Respondent).

The 2^nd Defendant (Appellant) in person, present.