Read the full judgment text of CACV 000168/2008 on BabelCite. This Court of Appeal judgment was delivered on 5 February 2009 before Cheung JA.
Civil appeal – security for costs of appeal – impecuniosity of plaintiff – whether special circumstances established – whether merits of appeal warrant exercise of discretion against ordering security – plaintiff Hong Kong company linked to Hainan Development Bank ('HDB') – loans of about HK$30,280,000 advanced to 1st defendant – Amended Statement of Claim struck out at first instance for disclosing no reasonable cause of action – appeal brought against striking-out judgment – 1st defendant applies for security for costs of appeal – whether the 1st defendant has shown special circumstances justifying the imposition of security – held: impecuniosity established as special circumstance – plaintiff set up in Hong Kong without HDB's permission – ceased trading – holds no real property in Hong Kong – only listed securities of HK$233,700 disclosed – loans of HK$70,270,000 outstanding with limited recovery prospects – no clear statement of assets and liabilities – no indication HDB will fund security – whether the appeal is sufficiently meritorious to displace discretion to order security – held: no – plaintiff failed to plead particulars of fraud including identity of parties and how fraud was practised on the plaintiff – representative Mr. Liu Yu was shareholder of 1st and 3rd defendants and signed instruments relating to their change of name – appeal does not appear meritorious enough to displace discretion – security ordered in sum of HK$450,000 (reduced from requested HK$500,000) to be paid to Court on or before 27 February 2009 – appeal stayed pending payment – in default of payment, appeal dismissed with costs to 1st defendant – costs of the application to be in the cause of the appeal.
Legal issues: Whether impecuniosity constitutes special circumstances justifying security for costs of appeal · Whether the appeal's merits warrant exercising discretion against ordering security
Outcome: Security for costs of the appeal ordered against the plaintiff in favour of the 1st defendant; appeal stayed pending payment; in default of payment the appeal to be dismissed with costs to the 1st defendant.
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