Hui Yin Sang and Others v. Tsoi Ping Kwan and Others

HCA392/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 392 OF 2008

____________________

BETWEEN

____________________

Before: Deputy High Court Judge Mimmie Chan in Chambers (open to public)

Date of Hearing: 30 September 2011

Date of delivery of Decision: 30 September 2011

_______________

D E C I S I O N

_______________

1.I will give my ruling very briefly. In essence, the Defendants are really saying that in the exercise of my discretion under Order 23 and in not ordering security for costs against the 3rd and the 4th Plaintiffs in this case, I erred in law or failed to take relevant factors into consideration in finding that they are not ordinarily resident outside Hong Kong.

2.I do not agree with the Defendants’ argument that the decision in Silverstone Development Limited has laid down any new principle of law or even any new approach applicable to determine the residence of an offshore company.  All the circumstances in which the company carries on its business should be taken into account, and all relevant factors were taken into account in my exercise of discretion.  These factors included the so-called reason for existence of the companies, as referred to in Silverstone. 

3.I am not satisfied that there are reasonable prospects of success to argue on appeal that the 3rd and 4th Plaintiffs are ordinarily resident out of Hong Kong.

4.On the question of whether the 3rd and the 4th Plaintiffs are nominees and will be unable to pay the Defendants’ costs, this involves appealing against a finding of facts, or inference on the facts as the Defendants argue, at the interlocutory stage.  Although the threshold for an appeal on facts is high, the prospects of the intended appeal do not have to be shown to be probable, only more than fanciful.  I cannot say that there are no reasonable prospects of the Court of Appeal coming to a different conclusion on the available evidence that the 3rd and the 4th Plaintiffs are nominees, and that they will not be able to pay costs.

5.I will accordingly grant leave to the Defendants to appeal, with costs of the application for leave in the course of the appeal.

6.As for the costs order nisi for the application for security for costs made on 21 July 2011, I agree that they should be varied to be payable by the 1st and 2nd Defendants in any event.

7.In relation to the striking-out application, the summons was first issued in November 2010, to strike out all references to the 1st and the 2nd Plaintiffs in the Re-amended Statement of Claim.  The Plaintiffs applied in May 2011 for leave to re-re-amend, and leave was granted by the Master on 12 May 2011(the purple amendments).  By the purple amendments, the Plaintiffs identified in the prayer for relief those claims for relief sought by the 1st and 2nd Plaintiffs, and those sought by the 3rd and 4th Plaintiffs respectively.  The purple amendments show that the 1st and 2nd Plaintiffs only seek relief under paragraphs 2, 5, 6A, 14A, 15, 16, 16B, 17 and 18 of the prayer.  This, in my opinion, constitutes the 1st and 2nd Plaintiffs’ acknowledgement that they are not entitled to the remainder of the claims for relief. 

8.The costs of the application for amendment were already awarded to the Defendants.

9.After the purple amendments, the Defendants pursued their striking-out application in relation to the claims made by the 1st and 2nd Plaintiffs under paragraphs 2, 5, 15 and 16B of the prayer for relief.  At the hearing of the application for striking-out which was before me on 30 June 2011, arguments were confined to whether paragraphs 2 and 5 should be struck out.  I ruled against the striking-out of these two paragraphs.

10.In the light of the history of the matter, I consider that the Defendants’ striking-out application has succeeded in part, but only to the extent of confining the 1st and 2nd Plaintiffs’ claims to those identified by the purple amendments to the prayer.  The hearing on 30 June 2011 focused on the application for security for costs, and that part of the Defendants’ striking-out application as was argued at the hearings was very short in duration.

11.Accordingly, I consider that a fair costs order would be for 50% of the costs of and occasioned by the striking-out summons to be paid for by the 1st and 2nd Plaintiffs to the 1st and 2nd Defendants in any event, save that the costs of the hearing on 30 June 2011 are to be paid by the 1st and 2nd Defendants to the 1st and 2nd Plaintiffs in any event.  My costs order nisi made on 21 July 2011 is to be varied only to such extent.

Mr Tony Ko, instructed by Messrs Wilson Yeung & Co, for the 1st to 4th Plaintiffs

Mr Johnny Mok, SC, and Mr Anson Wong, instructed by Messrs Yuen & Partners, for the 1st and 2nd Defendants