Standard Chartered Bank v. Li Wai Ping and Others
Read the full judgment text of CACV 73/2011 on BabelCite. This Court of Appeal judgment was delivered on 11 October 2011.
1. By summons filed on 6 September 2011, the plaintiff (“the Bank”) applies for an order that the 2 nd defendant provides security for its costs in her appeal from the Judgment handed down on 17 February 2011. The application was made under Order 59 rule 10 of Rules of the High Court, Cap.4A.
Cites 3 cases
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CACV73/2011 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO. 73 OF 2011 (ON APPEAL FROM HCA 10587/2000 & HCA 3575/2003 (consolidated)) ----------------------- COURT OF FIRST INSTANCE ACTION NO. 10587 OF 2000 -----------------------
AND ACTION NO. 3575 OF 2003 ---------------------
Before : Hon Chu JA in Chambers Date of Hearing : 11 October 2011 Date of Decision : 11 October 2011 ----------------------- DECISION ----------------------- 1.By summons filed on 6 September 2011, the plaintiff (“the Bank”) applies for an order that the 2nd defendant provides security for its costs in her appeal from the Judgment handed down on 17 February 2011. The application was made under Order 59 rule 10 of Rules of the High Court, Cap.4A. The Judgment 2.In HCA10587/2000, the Bank claimed against the three defendants as guarantors of the liabilities of Peace Hill Development Limited and obtained summary judgment against the 1st defendant, who is respectively the husband and father of the 2nd and 3rd defendants. The 2nd and 3rd defendants denied liability. They both raised the defence of undue influence. Additionally, the 2nd defendant pleaded non est factum and misrepresentation on the part of the 4th defendant (“the Solicitors”), who was instructed by the Bank to deal with the guarantee given by the 1st to 3rd defendants (“the Guarantee”). Both the 2nd and 3rd defendants counterclaimed against the Bank for an order of rescission of the Guarantee with the 2nd defendant further counterclaiming for damages for misrepresentation. 3.In light of the pleaded case of the 2nd and 3rd defendants, the Bank commenced HCA3575/2003 against the Solicitors for breach of contract and/or negligence, in the event the Court found in favour of the 2nd and 3rd defendants. The 2nd defendant also claimed against the 4th Solicitors for an indemnity or damages in respect of the Bank’s claim against her, relying on the misrepresentation allegedly made by the handling solicitor. 4.The two actions were consolidated by the order of the Registrar dated 9 May 2005. The trial was heard by Mr Justice J Poon. 5.By Judgment handed down on 17 February 2011, Poon J found in favour of the Bank on the Guarantee and rejected the defences of undue influence, non est factum and misrepresentation. He entered judgment for the Bank’s claim against the 2nd and 3rd defendants for the sum of HK$23,175,752.26 together with interest. He dismissed the 2nd and 3rd defendants’ counterclaim against the Bank as well as the Bank’s and the 2nd defendant’s respective claim against the Solicitors. 6.By his Decision handed down on 7 June 2011, Poon J ordered the 2nd and 3rd defendants to pay the Bank’s costs in HCA10587/2000, the costs of the Bank and of the Solicitors in HCA3575/2003 as well as the Solicitors’ costs of defending the 2nd defendant’s claim for damages, the last of which is on indemnity basis. 7.By her Notice of Appeal dated 27 April 2011, the 2nd defendant appeals against the main Judgment of 17 February 2011. Consequently, the Bank filed a Respondent’s Notice seeking judgment against the Solicitors in the event the 2nd defendant’s appeal was allowed. 8.By another Notice of Appeal dated 30 June 2011, the 2nd defendant appeals against the Decision on costs handed down on 7 June 2011. The application for security for costs 9.The Bank’s present application relates only to the costs of the appeal against the Judgment of 17 February 2011. 10.The principal ground on which the application is made is that the 2nd defendant is impecunious in that she has no visible means of her own to meet the Bank’s costs of her appeal in the event such an order is made against her. Relevant legal principles 11.Under Order 59 rule 10(5) of Rules of the High Court, the Court of Appeal may, in special circumstances, order that security be given for the costs of an appeal as may be just. 12.It is settled practice to require security for costs to be given by an appellant who would be unable through impecuniosity to pay the costs of the appeal, if unsuccessful. The court, however, has a discretion and is entitled to consider other relevant factors such as the strength of the appeal to determine whether or not it would be just to order that security for costs be provided. Once a case of impecuniosity is demonstrated, it is generally up to the appellant to demonstrate countervailing factors militating against an order being made: See Chung Kau v. Hong Kong Housing Authority & Others [2004] 2 HKLRD 650 and Hong Kong Civil Procedure 2011 Vol.1 para.59/10/29. 13.In deciding whether to order security for costs of an appeal, the court takes into account the fact that the appellant has already had the issue concerned determined in the court below, and it is prima facie an injustice to a respondent to allow an appeal to the Court of Appeal to proceed without security for costs being furnished in circumstances where the respondent will be unable to enforce against the appellant any order for costs made by the Court of Appeal: Hong Kong Civil Procedure 2011 Vol.1 para.59/10/28. Impecuniosity of the 2nd defendant 14.In contending that the 2nd defendant is impecunious, the Bank relies on: (i) the fact that the 2nd defendant was on legal aid in the two actions below; (ii) the 2nd defendant admittedly was throughout financially dependent on the 1st defendant, who was adjudicated bankrupt on 27 February 2002; and (iii) the 2nd defendant’s financial position could not have improved since the conclusion of the trial below. 15.The 2nd defendant has not filed any evidence to contest the application. She confirms at this hearing that she has no money and that she has throughout relied on the 1st defendant financially. Accordingly, there is no dispute, and I accept, that the 2nd defendant is impecunious and does not appear to have the means to satisfy an order for costs against her in the event such an order were to be made. Merits of the appeal 16.In deciding on how to exercise my discretion under Order 59 rule 10, I have regard to the grounds on which the 2nd defendant mounts her appeal. In her Notice of Appeal, the 2nd defendant raises two main grounds. They are: (i) the trial Judge erred in finding that the 2nd defendant was a “hidden” director assisting the 1st defendant in the business; and (ii) the trial Judge erred in his findings on what happened at the meeting on 8 October 1997 at which the Guarantee was executed by the 1st to 3rd defendants. 17.When considering the merits of the appeal, a detailed examination of the case and arguments is neither necessary nor desirable. All that the court needs to do is to form a preliminary view: Chung Kau v. Hong Kong Housing Authority & Others, supra. 18.It is evident from the Judgment that the crucial issue underlying the disputes and the main issues is the credibility of the 1st to 3rd defendants, Mr Pang, the handling solicitor, and Mr A Chan, the bank officer. It is also trite that the 2nd and 3rd defendants bear the burden of proving their respective defences. In order to succeed in their defence and counterclaim, they have to demonstrate their evidence of the relevant events is truthful and reliable. The trial Judge had the benefit of seeing and hearing the witnesses and their evidence. He concluded that the 2nd and 3rd defendants and their witness, the 1st defendant, were not truthful and their evidence was not credible. He rejected their evidence on the important issues as to whether the 2nd and 3rd defendants signed the Guarantee under the undue influence of the 1st defendant and/or in ignorance of its terms and effect, whether there was misrepresentation by the handling solicitor as well as what in fact happened at the October meeting. On this basis, he concluded that the 2nd and 3rd defendants had failed in making good their case against the Bank and the Solicitors. 19.The challenges that the 2nd defendant seeks to raise in her appeal are directed at the factual findings of the trial Judge and in turn his assessment and conclusions on the credibility of the witnesses, including that of the 2nd defendant herself. It is trite that unless an appellant can demonstrate that the trial judge was plainly wrong in the conclusions he reached on the facts, the Court of Appeal would not disturb his assessment on witnesses’ credibility and findings of fact: Ting Kwok Keung v. Tam Dick Yuen & Others [2002] 3 HKLRD 1, at para.42. 20.Mr Wong who appears for the Bank on this application submits that, despite the grounds set out in her Notice of Appeal, the 2nd defendant has not shown that the trial Judge was plainly wrong on the two findings of fact that are in issue in the appeal. I agree. It should be noted that the trial Judge came to these findings of fact because he considered the defence case and evidence incredible and the witnesses of the Bank and the Solicitors credible, having regard to the contemporaneous documents and the objective circumstances. The several arguments set out in the Notice of Appeal to challenge the trial Judge’s findings had in fact been considered by the trial Judge and were rejected for reasons that he gave in the Judgment. 21.I am not convinced that the 2nd defendant’s appeal has substantial chances of success and/or that there are other circumstances justifying exercising my discretion against making an order for security for costs of the appeal. Security to be ordered 22.I turn finally to consider the amount of security to be ordered. The Bank asks for HK$770,154.66 and has provided a skeleton bill of costs showing the breakdown. Having gone through the items, I am of the view that the appropriate amount of security to be ordered is HK$ 300,000. As a general observation, I note that the handling partner is a very senior and experienced practitioner. Further, the present application and the appeal are not complex and do not raise difficult points of law. And the papers involved in the appeal would all have been considered in the trial below. Specifically on the items in the skeleton bill of costs, I consider: (1) the amount of time charged by the handling partner (both already incurred and to be incurred) and by the trainee solicitor (to be incurred) is too long. Examples include the time for communicating with client, counsel and the 2nd defendant, conference(s) with counsel, perusal and preparation of documents, especially when the papers for the present application were drafted by counsel who is separately charging for the work, and the preparation of appeal bundle, submissions and authorities. I also consider the brief fee of counsel for the appeal is very much on the high side, having regard to the papers involved (which are unlikely to be voluminous) and also the issues involved (which are limited and not complex). Conclusion 23.For the reasons set out above, the bank’s application is allowed. There is an order in terms of the summons save that the amount of security to be furnished by the 2nd defendant is revised to HK$300,000 and the time for providing the security is 60 days. 24.The costs of the present application for security of costs are to be paid by the 2nd defendant to the Bank, assessed at HK$35,000.
The 2nd defendant (appellant), unrepresented, present. Mr Wong Chun Kit Adrian, instructed by Messrs Tsang, Chan & Wong, for the plaintiff (respondent). | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment