Read the full judgment text of HCA 1323/2010 on BabelCite. This Court of First Instance judgment was delivered on 31 May 2012 before Mr Recorder H Wong SC.
Civil procedure – security for costs – O 23 r 1(1)(a) of the Rules of High Court – plaintiff ordinarily resident outside jurisdiction (Singapore) – whether residence-based distinction discriminatory under Hong Kong Bill of Rights Ordinance (Cap 383) – whether discretion constrained by reference to enforcement difficulties abroad only – whether plaintiff may adduce further affirmations on appeal without cross-appeal. Appeal from Master's refusal to order security for costs in HCA 1323/2010, an action for breach of an alleged oral 'Investment Agreement' whereby the plaintiff, a Singapore resident, subscribed for 54 million shares in the 3rd defendant at HK$0.37 each (HK$19,980,000) and alleged a HK$20 million investment with a 6-month moratorium, plus three alleged misrepresentations concerning the issuance of new shares, the existence of independent co-investors, and the holding of HK$10 million on trust for investment in Luson Biotechnology Development Limited. Whether the plaintiff can refer to the 2nd and 3rd affirmations on appeal when the Master refused leave and no cross-appeal was filed – no; absent a cross-appeal, the court has no jurisdiction to vary the Master's ruling (Jindal Exports Ltd v Waco Trading Co Ltd [2000] 2 HKC 46); the recordings dated from 2009 and no explanation for the delay was given. Whether O 23 r 1(1)(a) is discriminatory – no; the Hong Kong Bill of Rights does not expressly prohibit discrimination on grounds of residence, residence is a rational criterion for differential treatment, and the reasoning of Mund & Fester v Hatrex International Transport [1994] ECR I-467 and Fitzgerald v Williams [1996] QB 657 (that foreign residents are likely to be foreign nationals) does not translate to Hong Kong, which is not a State and has no 'Hong Kong nationals'; Mainland Chinese plaintiffs residing outside Hong Kong are not necessarily of non-Chinese nationality, and there is no political/economic union equivalent to the Brussels/Lugano Convention that would render the discrimination unjustified. The court declined to follow Nasser v United Bank of Kuwait [2002] 1 WLR 1868 and Izumo Mokko Co Ltd v TS Lines Ltd [2007] 2 HKLRD 363, and followed Thune v London Properties Ltd in holding that the plaintiff's status and impecuniosity may be considered in the exercise of discretion. Whether security for costs should be ordered on the facts – no; the Foreign Judgments (Reciprocal Enforcement) Ordinance (Cap 319) and the relevant Order (Cap 319A) provide for reciprocal enforcement between Hong Kong and Singapore, Singapore is a common law English-speaking jurisdiction, the defendants filed no evidence of special enforcement difficulties, and mere foreign residence does not justify ordering security. The plaintiff had a bona fide claim but had not demonstrated a high degree of success on the merits (Sunchase International Group (China) Ltd v Vincor Group of Companies (Investment) Ltd [2004] 1 HKLRD 731; PT Graha Multimulia v Silver Tech Enterprise Limited, HCCW 883/2004). The appeal of the 1st, 2nd and 3rd defendants was dismissed, and the defendants were ordered to pay the costs of the appeal to the plaintiff, to be taxed if not agreed.
Legal issues: Admissibility of further affirmations on appeal without cross-appeal · Whether O 23 r 1(1)(a) is discriminatory under HKBOR · Exercise of discretion to order security for costs against a Singapore-resident plaintiff
Outcome: Appeal dismissed; security for costs not ordered against the Plaintiff
Cites 7 cases