Pine Enterprises Ltd v. Cyber Strategy Ltd and Another
Read the full judgment text of CACV 116/2008 on BabelCite. This Court of Appeal judgment was delivered on 12 December 2008 before Cheung JA and Yuen JA.
Civil procedure – security for costs – application for leave to appeal out of time – whether 'special reasons' existed to extend time for lodging security – inordinate and unexplained delay – merits of underlying appeal – gross sum costs assessment – On 14 March 2008 Deputy Judge To gave judgment for the Plaintiff and 1st Third Party against the Defendants with costs on an indemnity basis – Defendants appealed and were ordered by Rogers VP on 18 July 2008 to provide security of $1.2 million by 15 August 2008 – Defendants applied on 12 August 2008 for a 42-day extension supported only by a letter from their BVI holding company alleging that the Beijing Olympics had caused difficulties to funding arrangements – extension refused on 18 August 2008 – Defendants did not appeal within the 28 August 2008 deadline but waited until 26 September 2008 to apply for leave to appeal out of time – whether leave should be granted – test requires satisfactory explanation for delay and some prospect of success – delay of nearly one month against 10-day period prescribed by Rules of the High Court was inordinate – excuses of being preoccupied with other applications and seeking further counsel advice did not bear scrutiny – further unexplained two-week delay after funds became available on 11 September 2008 – on the merits of the extension application, security order made three weeks before Olympic Games commenced and the holding company letter was unsupported by any bank or financial institution documents – no evidence of the nature of the funding difficulties – 'special reasons' not established – prejudice to Defendants from loss of appeal opportunity not in itself a ground for granting an extension otherwise unjustified – underlying appeal challenged findings of fact which the Court of Appeal rarely disturbs – leave to appeal out of time refused – summons dismissed with costs – gross sum costs of $60,000 awarded to the Plaintiff and 1st Third Party, reduced from the sum claimed by 4 hours of handling partner time.
Legal issues: Whether leave to appeal out of time should be granted from order refusing extension of time to lodge security · Assessment of gross sum costs for the unsuccessful application
Outcome: Defendants' summons for leave to appeal out of time, to set aside the No Extension order, and for leave to pay $1.2 million into court dismissed with costs.
Cited by 5 cases · Cites 1 case
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CACV 116/2008 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO. 116 OF 2008 (On Appeal from HCA 1221 of 2006) ---------------------- BETWEEN
---------------------- Before: Hon Cheung and Yuen JJA in Court Date of hearing and judgment: 11 December 2008 Date of Reasons for judgment: 12 December 2008 ---------------------------------------------- REASONS FOR JUDGMENT -------------------------------------------- Hon. Yuen JA (giving the judgment of the court): 1.On 14 March 2008 Deputy Judge To gave judgment in favour of the Plaintiff and the 1st Third Party against the Defendants with costs on an indemnity basis. (As a matter of completeness, I would mention that the Defendants abandoned their claim against the 2nd Third Party during the trial). 2.The Defendants lodged a Notice of Appeal on 29 April 2008. Summons for security for costs 3.By a summons filed on 20 June 2008, the Plaintiff and 1st Third Party sought security for costs of the appeal in the sum of $2 million. Rogers V-P’s order for security for costs (“the Security order”) 4.The summons was heard by Rogers VP on 18 July 2008. He ordered that the Defendants give security for costs of the appeal in the sum of $1.2 million on or before 15 August 2008. The security could be provided by means of cash payment or bankers draft or a bank guarantee. The Vice-President further ordered:
5.There was no appeal from the Security order. Summons for extension of time to lodge security 6.On 12 August 2008, 3 days before the deadline for compliance with the Security order, the Defendants issued a summons for an extension of time for a period of 42 days from the deadline. 7.The summons was supported by an affirmation from the Defendants’ solicitors made on 12 August 2008 in which he exhibited a letter dated 7 August 2008 from Beijing Olympics Ltd, a BVI company which is the holding company of the Defendants. In this letter, it is alleged that “the standstill situation in Beijing due to the Olympic Games has created difficulties to our funding arrangement to Hong Kong”, but that it was expected that matters would return to normal in mid-September 2008. 8.The summons was listed for hearing on Monday 18 August 2008, which was after the deadline for compliance on Friday 15 August 2008. Apparently no interim stay of the Security order was obtained. Rogers V-P’s order refusing extension of time (“the No Extension order”) 9.Be that as it may, on 18 August 2008, the Vice-President heard the summons and refused to extend the deadline for compliance. The Vice-President’s reasons were set out in his written Decision of the same day. The Vice-President also ordered the Defendants to pay gross sum costs in the amount of $30,200. 10.No appeal from that order was lodged within the time stipulated by the Rules of the High Court i.e. 28 August 2008. Summons for leave to appeal out of time 11.It was not until 26 September 2008, nearly a month later, that the Defendants issued the present summons for:
12.This summons was supported by an affirmation of the Defendants’ solicitor stating first, that a cashier order in the sum of $1.2 million was made available by the Defendants on 11 September 2008; secondly, that the solicitors for the Plaintiff and the 1st Third Party had on 12 September 2008 refused to agree to an extension of time for compliance with the Security order; and thirdly, that in the 2 weeks after that refusal, the Defendants did not apply for leave to appeal the No Extension order out of time as they “were then pre-occupied with the Plaintiff’s application for an order for sale of Union Resources shares and also wanted to seek further counsel advice on the matter”. 13.We have considered the submissions of Counsel for the Defendants Mr CY Li (who did not appear at the hearing of the application on 18 August 2008). At the conclusion of the hearing on 11 December 2008 we dismissed the Defendants’ summons with costs. Our reasons appear below. Discussion 14.First, the delay of nearly a month (28 August 2008 - 26 September 2008) in lodging the appeal against the No Extension order is inordinate when viewed in light of the period allowed by the Rules of the High Court (10 days). 15.Also we do not accept that there has been any satisfactory explanation for the delay. There was no reason why the Defendants could not have lodged an appeal within time. If they considered that the Vice-President was wrong in refusing to accept that the Olympic Games caused difficulties in funding, the fact that the funds did not arrive before mid-September should not have stopped the Defendants’ proceeding with the appeal. More importantly there was a further 2-week delay between 11 September 2008 when the funds did arrive and 26 September 2008 when the summons was issued. The excuses proffered for that further period of delay do not bear scrutiny at all. 16.As for the merits of the application, we take the view that the Vice-President was entitled to refuse the Defendants’ application for extension. Putting to one side the Vice-President’s concerns about Beijing Olympics Ltd and whether it has any assets, the fact of the matter is that the application for extension was based, and based only, on the letter of 7 August 2008. That letter was far from sufficient to justify an extension of time “for special reasons”. The Security order had been given on 18 July 2008, a period of 3 weeks before the commencement of the Olympic Games (the date of which was well-publicized beforehand). There was no evidence of what the “difficulties” of the funding arrangement were, or when they were first encountered, nor what the “standstill situation” meant, or when it arose. If what was meant was an unforeseen problem in remittance from the Mainland to Hong Kong, one would have expected to see supporting documents from a bank or other financial institution. There were (and are) none. 17.Although the funds have been made available since the No Extension order, the fact remains that under the Security order (from which there has been no appeal), an extension would be granted only for “special reasons”. No such special reasons have been shown on the Defendants’ evidence. 18.As for prejudice, we are well aware of the fact that the refusal to extend time for lodging security means that the Defendants would have lost their opportunity of appealing Deputy Judge To’s judgment and they would suffer severe prejudice . But as we pointed out in the course of the hearing, the Defendants’ fate was in their own hands. It was for them to provide evidence of a far better quality to justify an extension “for special reasons” and they have no-one to blame but themselves for not having done so. It is well-established that the lack of prejudice to the other party is not in itself a ground for granting an extension which is otherwise unjustified. 19.Finally we have also considered the merits of the Defendants’ appeal. Having read Deputy Judge To’s judgment and the grounds of appeal, we are inclined to agree with the Vice-President that the appeal revolves around findings of fact. That impacts on the likelihood of success on appeal, as the Court of Appeal rarely interferes with a trial judge’s finding of facts. Order 20.Taking all those matters into account, we dismissed the Defendants’ summons filed on 26 September 2008 with costs to the Plaintiff and the 1st Third Party. 21.The Plaintiff and the 1st Third Party have asked for gross sum costs. Mr Li did not object to that course and has left the assessment to the court. Having considered the costs statement provided at the conclusion of the hearing, we take the view that the time taken by the handling partner in considering documents and dealing with correspondence should be reduced by 4 hours, and we would round down the gross sum to $60,000 which we order to be paid by the Defendants to the Plaintiff and 1st Third Party.
Mr CY Li and Miss Angela Gwilt instructed by YT Szeto & Co for the Defendants (Appellants) Miss Linda Chan instructed by Alfred Lam Keung & Ko for the Plaintiff and the 1st Third Party (Respondents) |
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