Mammy Pancake Co Ltd v. Carla Day Ltd and Others

On 19 August 2026, the Court of Appeal (Cheung and Au JJA) handed down its decision in CACV 401/2025, Mammy Pancake Company Limited v Carla Day Limited & Ors, allowing the plaintiff's application for security for costs of the defendants' appeal. Mr Patrick Chong, instructed by Au & Vrijmoed, acted for the successful plaintiff.

The underlying dispute concerned a breach of confidence and good faith claim arising from the defendants' alleged misuse of the plaintiff's pancake business know-how. After a two-day trial in HCA 1044/2021, Fung J awarded the plaintiff $3,803,782.32 in loss of profits and $300,000 in exemplary damages against the 1st and 2nd defendants, both absent from the trial.

The defendants' attempts to set aside that judgment and extend time to appeal were dismissed by Fung J on 16 May 2025. They renewed their extension application in CAMP 108/2025, where this Court (Au JA and Cheng J) granted leave to appeal only on the exemplary damages ground. They also filed a separate appeal (CACV 401/2025) against the dismissal of their set-aside application, prompting the plaintiff's security application.

The Court held that:

(1) Special circumstances were engaged, namely the defendants' impecuniosity and the 2nd defendant's residence abroad, and this was not disputed (§8).

(2) The defendants' grounds of appeal had no real prospect of success. The Court had already considered substantially the same grounds in CAMP 108/2025 and found them unmeritorious save for the exemplary damages issue. That ground alone could not defeat the application because the defendants continued to pursue grounds on liability and loss of profit, which would substantially increase the costs of the appeal (§9).

(3) The challenge to the irregularity of the 1st Judgment was in substance a challenge to the Judge's exercise of discretion in refusing to set it aside, a high threshold the defendants had not met. Fung J had properly addressed the grounds, finding that the 2nd defendant had deliberately absented herself from the trial (§10).

(4) The argument that security would stifle the appeal failed. Bare assertions of inability to pay were insufficient; the defendants had access to a joint overdraft of approximately AUD 98,000, the 2nd defendant's husband owned a house in Australia, and the 2nd defendant had funded her own affirmation opposing the application (§§11-12).

The Court ordered security of $680,000 (reduced from $790,760 sought) to be paid into Court within 28 days, with a stay of proceedings until payment and dismissal of the appeal in default. The defendants were also ordered to pay the plaintiff's costs of the application, summarily assessed at $180,000 (§§13-15).

For practitioners, an appellant resisting security on impecuniosity grounds must show more than bare inability to pay. The court will scrutinise available assets, including those held jointly or by family members. Pursuing multiple grounds of appeal, even where one has arguable merit, will weigh against reducing the security amount.