IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
CIVIL APPEAL NO. 193 OF 2006
(ON APPEAL FROM HCA nO. 132 OF 2006)
Before: Hon Cheung JA and Yeung JA in Court
Date of Hearing: 18 July 2006
Date of Judgment: 18 July 2006
Date of handing down Reasons for Judgment: 26 July 2006
Reasons for Judgment
Hon Yeung JA (giving reasons of Judgment of the Court):
1. On 26th June 2006, Rogers VP ordered the plaintiff – Ngan Tse Leung to pay into court $165,000 as security for the defendant’s costsof the appeal, failing which his appeal would be dismissed without any further hearing.
2. The plaintiff appealed against Rogers VP’s order. We dismissed his appeal but made no order as to costs. These are the reasonsfor our decision.
3. By a sale and purchase agreement dated 13 October 2005, the plaintiff agreed to purchase a property from Smartland Industries Limited(“Smartland”) and completion was scheduled to take place on 6 January 2006 at the defendant’s office. The defendant was thesolicitor acting for Smartland in the transaction.
4. The sale and purchase agreement stipulated, “the balance of the purchase price shall be fully paid by way of cashier order and/orsolicitors’ cheques” at completion.
5. However, the plaintiff insisted on paying the balance of the purchase price by his personal cheque for he claimed that cashier ordersand solicitors’ cheques were irrevocable and the payment could not be suspended if anything went wrong. The defendant, acting onthe instruction of Smartland, refused to accept the plaintiff’s personal cheque.
6. On 19 January 2006, the plaintiff commenced the present proceeding against the defendant, claiming that the defendant had “mishandledthe transaction”, and had “failed to exercise due diligence”. There were also allegations of “lack of jurisprudence” and“improper inference”. The gist of the allegations was that the defendant should not have refused to accept the plaintiff’spayment by personal cheques.
7. The plaintiff contended that under the sale and purchase agreement, cashier orders and/or solicitors’ cheques were required onlyif completion were to take place on Saturdays whereas other forms of payment should be accepted on a weekday.
8. The master struck out the plaintiff’s claim for disclosing no valid cause of action and Yam J (the judge) dismissed the appealagainst such decision. The plaintiff appealed against the judge’s order and the security for costs is related to the appeal.
9. “Security for costs of an appeal may be ordered where there are special circumstances which in the opinion of the court, renderit just to order security” (see Order 59/10/28, Hong Kong Civil Procedure).
10. The defendant had adduced evidence that the plaintiff had a history of giving dishonoured cheque. He also had not paid for the costsordered against him by the Master and the judgment amounting to $58,000. As a result the defendant had obtained a charging orderagainst a property of the plaintiff. The defendant had also incurred further costs in the application.
11. The property was acquired by the plaintiff on 4 January 2005 and is subject to a legal charge granted by the plaintiff in favourof GE Capital (Hong Kong) Limited. The plaintiff has chosen not to disclose the value of the property nor the amount due under thelegal charge.
12. In our view, the defendant has shown that the plaintiff is impecunious and will be unable to pay for the costs of the defendantif his appeal is dismissed.
13. As to the merits of the appeal, the judge had pointed out that there was no valid cause of action against the defendant as therewas no contractual relationship between him and the defendant. The sale and purchase agreement clearly stipulated that the balanceof the purchase price should be paid by way of cashier order and/or solicitors cheques. It was not up to the plaintiff to interpretsuch provision in a manner convenient to him.
14. In his notice of appeal, the plaintiff still contended that the sale and purchase agreement allowed him to make payment by personalcheques. He claimed that the defendant, as legal representative of Smartland, should bear all legal consequences and should thereforeindemnify him for all his loss.
15. We have considered the plaintiff’s cause of action against the defendant and his grounds of appeal. We are not satisfied thathe has such a high chance of success at the appeal that security should not be ordered against him.
16. The plaintiff further complains before us that the sealed order is different from what he perceives to be the order made by RogersVP. He says he is the registered owner of another property, which can be used, if necessary, as a guarantee for the defendant’scosts of the appeal. He has not, however, challenged the amount of the security ordered by Rogers VP.
17. We are not concerned with what the plaintiff perceives to be the order made by Rogers VP and we can only act upon the sealed orderthat had been approved by him.
18. The plaintiff may be the registered owner of a property. However that does not mean that the defendant’s position with regardto the costs of the appeal is secured. In any event, Roger VP had taken this aspect into consideration and there was no basis forsuggesting that his exercise of discretion was faulted.
19. The plaintiff’s appeal against Rogers VP’s order was therefore dismissed. The defendant was not legally represented and purportedto act in person without proper notice to such an effect. In the circumstance, we considered it right not to make any order as tocosts.
Plaintiff: In person, Present.
Defendant: In person, Present. Represented by Mr Lam Cheuk Yum.