CACV74/2024 UNIQUE REALTY LTD AND ANOTHER v. HONG KONG REAL ESTATE AGENCIES GENERAL ASSOCIATION LTD AND OTHERS - LawHero
CACV74/2024
上訴法庭（民事）Poon CJHC and Barma JA26/5/2025[2025] HKCA 473
CACV74/2024
A A
B B
CACV 74/2024, [2025] HKCA 473
On appeal from [2024] HKCFI 418
C C
IN THE HIGH COURT OF THE
D D
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL E
E
CIVIL APPEAL NO 74 OF 2024
F (ON APPEAL FROM HCMP NO 1132/2023) F
----------------------------------------
G G
IN THE MATTER of the HONG
H KONG REAL ESTATE AGENCIES H
GENERAL ASSOCIATION LIMITED
I (香港地產代理商總會有限公司) (the I
“Association”);
J IN THE MATTER of Order 102 of the J
Rules of High Court (Cap 4A);
K and K
IN THE MATTER of Sections 728-730
L L
of the Companies Ordinance (Cap 622).
M M
BETWEEN
N UNIQUE REALTY LIMITED (譽林地產有限公司) 1st Plaintiff N
O UNITED PROSPER REAL ESTATE CO LTD 2nd Plaintiff O
(協榮物業有限公司)
P P
and
Q Q
st
HONG KONG REAL ESTATE AGENCIES 1 Defendant
R GENERAL ASSOCIATION LIMITED R
(香港地產代理商總會有限公司)
S S
YU CHUNG LIT (余忠烈) trading as PO SHING 2nd Defendant
T PROPERTY CO (寶盛地產公司) T
U U
V V
- 2 -
A A
YING LOK PROPERTY LIMITED 3rd Defendant
B B
(盈樂地產有限公司)
C SILVER POWER PROPERTY AGENCY LIMITED 4th Defendant C
(銀力地產代理有限公司)
D D
LEUNG MO LIN (梁慕蓮) trading as HANG FUNG 5th Defendant
E PROPERTY AGENCY CO (恆豐地產公司) E
F WONG MAN LING (王曼玲) trading as DAIRY 6th Defendant F
ESTATE DECORATION ENG CO
G (大利地產裝飾工程公司) G
H TUNG SHU MEI (董澍媚) trading as KIN YIP 7th Defendant H
PROPERTY DECORATION WORKS
I (建業地產裝修工程公司) I
J
HUNG CHIU YEUNG (洪朝陽) trading as TIME’S 8th Defendant J
PROPERTY CO (時代地產)
K K
KWOK YING ELAINE (郭盈) trading as GRAND 9th Defendant
L
PROPERTY (尊尚物業) L
KAMSON PROPERTY AGENCY LIMITED 10th Defendant
M M
(金誠物業代理有限公司)
N N
WISE CONSULTANCY LIMITED 11th Defendant
(蔚城顧問有限公司)
O O
CHUP WANG AGENCY LIMITED 12th Defendant
P (捷宏代理有限公司) P
Q YAU WO YAU (邱和友) trading as KAM HUNG 13th Defendant Q
PROPERTY CO (錦鴻地產公司)
R R
th
LAND MOBILE PROPERTY CONSULTANT 14 Defendant
S LTD (中大策略物業顧問行有限公司) S
T WONG CHING KUM (黃靜琴) trading as WINFAIR 15th Defendant T
ESTATE AGENCY (永暉地產代理)
U U
V V
- 3 -
A A
CHAN PIK YUK (陳碧玉) trading as GOLDEN 16th Defendant
B B
PALACE PROPERTY (金鑾物業)
C C
ONE PROPERTY CONSULTANT LIMITED 17th Defendant
(匯一物業代理有限公司)
D D
CITY PROPERTY LIMITED 18th Defendant
E (城巿地產代理有限公司) E
F CHEE SHING PROPERTIES LIMITED 19th Defendant F
(置城物業有限公司)
G G
CHONG STRONG LIMITED 20th Defendant
H (莊細莊有限公司) H
BEST HOME AGENCY LIMITED 21st Defendant
I I
(安家代理有限公司)
J J
-----------------------------------
K K
Before: Hon Poon CJHC and Barma JA in Court
L
Dates of Written Submissions: 2, 16, 22 & 23 July 2024 L
Date of Judgment: 27 May 2025
M M
___________________
N N
JUDGMENT
O ___________________ O
P P
The Court:
Q Q
Introduction
R R
1. By an originating summons dated 19 July 2023, the plaintiffs
S S
sought a summary determination of the validity of an election of the
T 16th Executive Committee (“EC”) of the 1st defendant’s Central-Western T
District Branch (“CW Branch”), held on 11 April 2023, at its Extraordinary
U U
V V
- 4 -
A A
General Meeting (“EGM”). The CW Branch is one of the 12 branches of the
B B
1st defendant. The plaintiffs were not elected at the said EGM but claimed
C that they were instead validly elected as members of the EC in another C
apparent Annual General Meeting (“AGM”) held by the CW Branch two
D D
th
days later on 13 April 2023. They contended that the election of the 16 EC
E at the EGM was invalid for breach of the 1st defendant’s articles of E
association.
F F
G 2. By a judgment dated 1 February 2024, (the “Judgment”), G
Mr Justice Anthony Chan ruled against the 1st and 2nd plaintiffs. He held that
H H
the election held at the EGM of the CW Branch was not invalid for breach
I of the 1st defendant’s articles of association. The plaintiffs were thus held I
not to be validly elected as members of the EC of the CW Branch at its
J J
subsequent AGM.1
K K
3. The plaintiffs then appealed.
L L
M 4. By a summons dated 26 April 2024, the 2nd to 21st defendants, M
who were the elected members of the 16th EC pursuant to the EGM of the
N N
CW Branch held on 11 April 2023, seek security of costs in relation to the
O plaintiffs’ appeal in the amount of HK$198,600. 2 By a summons dated O
10 May 2024, the 1st defendant also seeks security of costs in relation to the
P P
plaintiffs’ appeal in the amount of HK$535,000. Both applications are
Q made on the ground that the plaintiffs are impecunious. Q
R R
5. Having considered the papers, we are of the view that it is
S appropriate to deal with the two applications based on written submissions S
T 1
The Reasons for Judgment was handed down on 2 February 2024: [2024] HKCFI 418. T
2
By the same summons, the 2nd to 21st defendants also seek to adduce new evidence as to the plaintiffs’
expiration of membership in the 1 st defendant on 30 November 2023 and 31 March 2024 respectively,
U which is not opposed by the plaintiffs. U
V V
- 5 -
A A
only, without an oral hearing, pursuant to Order 59 r14A(1) of the Rules of
B B
the High Court (RHC) (Cap 4A).
C C
Discussion
D D
6. The principles giving the Court’s exercise of the discretion in
E E
ordering security for costs of appeal under Order 59 rule 10(5) of the RHC
F are well established: F
G (1) The “special circumstances” referred to in the rule which G
justify the ordering of security include cases of insolvency or
H H
impecuniosity and difficulty or expense of enforcing an adverse
I costs order. The burden is on the defendant to demonstrate the I
plaintiff is impecunious.
J J
(2) In discharging the burden of demonstrating that the plaintiff is
K impecunious, the defendant is not expected to produce K
conclusive evidence of the plaintiff’s lack of means. It is
L
sufficient for the defendant to point to the surrounding L
circumstances or adduce some credible evidence in support of
M M
his belief that the plaintiff will be unable to pay the defendant’s
N costs. It is then up to the plaintiff to adduce such evidence as N
he thinks fit to demonstrate his means or to contradict the
O O
defendant’s evidence. The court shall decide whether a
P
reasonable person with ordinary experience of daily life would P
consider the plaintiff unable to pay such costs. The threshold is
Q just one of adducing credible evidence for the belief and falls Q
short of proof of lack of means to pay: Re Estate of Nina Kung
R R
(Security for Costs) [2023] 2 HKLRD 1221 per Cheung JA at
S [7]. S
(3) As a matter of practice, once an applicant for security can
T T
demonstrate that impecuniosity (or some other factor such as
U difficulty or expense in enforcing a costs order) exists, while U
V V
- 6 -
A A
the Court retains an overall discretion whether or not to make
B B
the order, it would then generally be up to the party resisting
C the application for security to demonstrate countervailing C
factors which would militate against such an order being made.
D D
A common countervailing factor to resist applications for
E security are the merits of an appeal. On consideration of the E
merits of the appeal, while a detailed examination is not
F required, the Court should form some sort of preliminary, even F
instinctive view. Where the merits appear to go strongly one
G G
way or the other, this may, by itself, be a decisive factor.
H However, if the Court takes the view that the appeal could H
really go either way, then generally it will look to the existence
I I
of any other factors to tilt the balance, in the absence of which
J
security will be ordered: Chung Kau v Hong Kong Housing J
Authority & Ors [2004] 2 HKLRD 650 per Ma CJHC (as he
K then was) at [14]. K
L L
7. Here, the defendants contend that based on the evidence before
M
the court, an inference ought to be made that the plaintiffs are impecunious M
and that they would likely encounter undue delay or be put to undue expense
N N
in enforcing any order for costs in relation to the plaintiffs’ appeal.
O O
st
8. The 1 defendant points to the following in support of its case
P P
of the plaintiffs’ impecuniosity:
Q (1) On the face of the evidence, it does not appear that the plaintiffs Q
have substantial assets. The 1st and 2nd plaintiffs have small
R R
paid-up capitals, being HK$10,000 and HK$1000 respectively.
S The registered office addresses of the plaintiffs do not appear S
to belong to the 1st or 2nd plaintiff on the basis of a land search
T T
conducted at the Land Registry. There are no known assets of
U
the plaintiffs. U
V V
- 7 -
A A
(2) There was no information whatsoever of any matters or
B B
information relating to the plaintiffs’ current financial position.
C There is no evidence of any business dealings, bank statements C
or even unaudited management accounts. No audited accounts
D D
of either the 1st or 2nd plaintiff were disclosed. The only
E evidence produced by the plaintiffs were of various business E
licences and certificates, which are insufficient evidence of the
F plaintiffs’ financial condition. F
G G
9. The 2nd to 21st defendants similarly point to a lack of evidence
H showing that the plaintiffs have sufficient means to pay the costs below and H
of the appeal, pointing out that the operation of the plaintiffs’ business as
I I
estate agents are as service providers and do not require owning of any assets.
J They also refer to the expiration of the plaintiff’s status as members of the J
1st defendant on 30 November 2023 and 31 March 2024 respectively and
K K
claim that they no longer have locus standi to sue and that the matter under
L appeal is in any event academic. L
M M
10. The plaintiffs, on the other hand, claim that the defendants have
N not been able to discharge the burden of establishing that the plaintiffs are N
allegedly impecunious or that this case falls under the “special
O O
circumstances” under Order 59 rule 10(5) RHC. They also claim that their
P intended appeal is meritorious and not academic. P
Q Q
11. In our view, the fact that the plaintiffs’ small paid up capital;
R that the lack of apparent ownership of assets, that the fact that the plaintiffs R
do not require the holding of any assets for the operation of their businesses,
S S
and that the complete absence of any evidence relating to the plaintiff’s
T current financial information or business returns, do cast serious doubt on T
whether the plaintiffs have means of pay an adverse costs order.
U U
V V
- 8 -
A A
12. We also find it telling that when the defendants raised doubts
B B
as to the plaintiff’s ability to pay costs in correspondence, the plaintiffs have
C not produced any meaningful evidence to address their concerns. The C
plaintiffs could only assert that they were “running their business of an
D D
ongoing concern in the industry of estate agency” and that they intended to
E continue to do the same, without, however, producing any evidence or E
information of their business dealings, bank statements, or audited accounts.
F F
When the solicitors of the 1 defendant requested for copies of the plaintiffs’
st
G audited reports in the past two years to support the plaintiffs’ assertion of G
their “ongoing concern”, the plaintiffs refused to provide the same. They
H H
only produced ongoing business licences and certificates but that falls far
I short of showing that they have the requisite financial ability. I
J J
13. In our view, from the available evidence, the only reasonable
K inference that can be drawn is that the plaintiffs are indeed impecunious. K
L L
14. As to the merits (or lack of merits) of the appeal, we do not find
M them to be such as to be decisive on the issue of security for costs either way. M
N N
15. We also do not see any other factors that will tilt the balance in
O favour of not ordering security against the plaintiffs. O
P P
16. In conclusion, we find it just to exercise our discretion to order
Q the plaintiffs to pay security for the defendants’ costs of the appeal. Q
R R
17. Turning to quantum, the principles concerning the assessment
S of the quantum of security for costs are summarised in Thapa Hari Bahadur S
v Paramount Engineering & Manpower Services Ltd [2022] HKCA 1516,
T T
per Au JA at [40]:
U U
V V
- 9 -
A A
(1) First, the Court normally takes a broad-brush approach and
B B
does not conduct a taxation of the respondent’s costs in fixing
C the quantum of security. Instead, the exercise on which it is C
engaged is to arrive at an appropriate estimation of the likely
D D
amount of costs which would be ordered to be paid by the
E appellant to the respondent on a party and party taxation. E
(2) Second, one of the factors to bear in mind when fixing the
F F
amount is the underlying objectives in Order 1A, rule 1 of the
G RHC, in particular rule 1(c) and (d) which highlight G
proportionality in conduct of proceedings and fairness between
H
the parties. H
I (3) Third, to facilitate the Court’s discretion on the appropriate I
amount of security, the applicant’s legal representatives must
J J
provide a realistic estimate of the time and costs likely to be
incurred in each stage of the proceedings which must bear some
K K
logical correlation to the complexity of the case and the issues
L involved. Otherwise, the Court is deprived of the assistance it L
rightly expects.
M M
18. The 1st defendant seeks the sum of HK$535,000. Having
N N
considered the complexity of the case and the issues involved, we consider
O that the estimated of the solicitors’ costs on the appeal (HK$382,800) to be O
on the high side and these should be substantially reduced. Taking a broad-
P P
brush approach, we consider that the appropriate amount of security should
Q be HK$150,000. Q
R R
nd st
19. The 2 to 21 defendants seek security in the sum of
S HK$198,600. We will also reduce this to HK150,000. S
T T
U U
V V
- 10 -
A A
Order
B B
20. We therefore make the following orders:
C C
(1) The plaintiffs do pay into court within 28 days: (i) the sum of
D D
HK$150,000 as security for the 1st defendant’s costs of the
E plaintiffs’ appeal; and (ii) the sum of HK$150,000 as security E
for the 2nd to 21st defendants’ costs of the plaintiffs’ appeal.
F F
(2) The appeal is stayed until the sums are paid.
G
(3) In default of payment, the appeal is dismissed without further G
order together with costs to the 1st defendant and the 2nd to
H H
21st defendants.
I
(4) The 1st defendant and the 2nd to 21st defendants to have the costs I
of their present applications, summarily assessed, respectively
J J
at HK$80,000 and HK$80,000.
K K
L L
M M
N N
(Jeremy Poon) (Aarif Barma)
Chief Judge of the Justice of Appeal
O O
High Court
P P
Written submissions by Mr Thomas Yeon, instructed by Christine M Koo
Q & Ip, Solicitors & Notaries LLP, for the 1st and 2nd plaintiffs Q
Written submissions by Mr Joseph Wong, instructed by Li, Kwok & Law,
R R
for the 1st defendant
S Written submissions by Ms Kitty Tsang, instructed by Paul Kwong & Co. S
for the 2nd to 21st defendants
T T
U U
V V
UNIQUE REALTY LTD AND ANOTHER v. HONG KONG REAL ESTATE AGENCIES GENERAL ASSOCIATION LTD AND OTHERS
A A
B B
CACV 74/2024, [2025] HKCA 473
On appeal from [2024] HKCFI 418
C C
IN THE HIGH COURT OF THE
D D
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL E
E
CIVIL APPEAL NO 74 OF 2024
F (ON APPEAL FROM HCMP NO 1132/2023) F
----------------------------------------
G G
IN THE MATTER of the HONG
H KONG REAL ESTATE AGENCIES H
GENERAL ASSOCIATION LIMITED
I (香港地產代理商總會有限公司) (the I
“Association”);
J IN THE MATTER of Order 102 of the J
Rules of High Court (Cap 4A);
K and K
IN THE MATTER of Sections 728-730
L L
of the Companies Ordinance (Cap 622).
M M
BETWEEN
N UNIQUE REALTY LIMITED (譽林地產有限公司) 1st Plaintiff N
O UNITED PROSPER REAL ESTATE CO LTD 2nd Plaintiff O
(協榮物業有限公司)
P P
and
Q Q
st
HONG KONG REAL ESTATE AGENCIES 1 Defendant
R GENERAL ASSOCIATION LIMITED R
(香港地產代理商總會有限公司)
S S
YU CHUNG LIT (余忠烈) trading as PO SHING 2nd Defendant
T PROPERTY CO (寶盛地產公司) T
U U
V V
- 2 -
A A
YING LOK PROPERTY LIMITED 3rd Defendant
B B
(盈樂地產有限公司)
C SILVER POWER PROPERTY AGENCY LIMITED 4th Defendant C
(銀力地產代理有限公司)
D D
LEUNG MO LIN (梁慕蓮) trading as HANG FUNG 5th Defendant
E PROPERTY AGENCY CO (恆豐地產公司) E
F WONG MAN LING (王曼玲) trading as DAIRY 6th Defendant F
ESTATE DECORATION ENG CO
G (大利地產裝飾工程公司) G
H TUNG SHU MEI (董澍媚) trading as KIN YIP 7th Defendant H
PROPERTY DECORATION WORKS
I (建業地產裝修工程公司) I
J
HUNG CHIU YEUNG (洪朝陽) trading as TIME’S 8th Defendant J
PROPERTY CO (時代地產)
K K
KWOK YING ELAINE (郭盈) trading as GRAND 9th Defendant
L
PROPERTY (尊尚物業) L
KAMSON PROPERTY AGENCY LIMITED 10th Defendant
M M
(金誠物業代理有限公司)
N N
WISE CONSULTANCY LIMITED 11th Defendant
(蔚城顧問有限公司)
O O
CHUP WANG AGENCY LIMITED 12th Defendant
P (捷宏代理有限公司) P
Q YAU WO YAU (邱和友) trading as KAM HUNG 13th Defendant Q
PROPERTY CO (錦鴻地產公司)
R R
th
LAND MOBILE PROPERTY CONSULTANT 14 Defendant
S LTD (中大策略物業顧問行有限公司) S
T WONG CHING KUM (黃靜琴) trading as WINFAIR 15th Defendant T
ESTATE AGENCY (永暉地產代理)
U U
V V
- 3 -
A A
CHAN PIK YUK (陳碧玉) trading as GOLDEN 16th Defendant
B B
PALACE PROPERTY (金鑾物業)
C C
ONE PROPERTY CONSULTANT LIMITED 17th Defendant
(匯一物業代理有限公司)
D D
CITY PROPERTY LIMITED 18th Defendant
E (城巿地產代理有限公司) E
F CHEE SHING PROPERTIES LIMITED 19th Defendant F
(置城物業有限公司)
G G
CHONG STRONG LIMITED 20th Defendant
H (莊細莊有限公司) H
BEST HOME AGENCY LIMITED 21st Defendant
I I
(安家代理有限公司)
J J
-----------------------------------
K K
Before: Hon Poon CJHC and Barma JA in Court
L
Dates of Written Submissions: 2, 16, 22 & 23 July 2024 L
Date of Judgment: 27 May 2025
M M
___________________
N N
JUDGMENT
O ___________________ O
P P
The Court:
Q Q
Introduction
R R
1. By an originating summons dated 19 July 2023, the plaintiffs
S S
sought a summary determination of the validity of an election of the
T 16th Executive Committee (“EC”) of the 1st defendant’s Central-Western T
District Branch (“CW Branch”), held on 11 April 2023, at its Extraordinary
U U
V V
- 4 -
A A
General Meeting (“EGM”). The CW Branch is one of the 12 branches of the
B B
1st defendant. The plaintiffs were not elected at the said EGM but claimed
C that they were instead validly elected as members of the EC in another C
apparent Annual General Meeting (“AGM”) held by the CW Branch two
D D
th
days later on 13 April 2023. They contended that the election of the 16 EC
E at the EGM was invalid for breach of the 1st defendant’s articles of E
association.
F F
G 2. By a judgment dated 1 February 2024, (the “Judgment”), G
Mr Justice Anthony Chan ruled against the 1st and 2nd plaintiffs. He held that
H H
the election held at the EGM of the CW Branch was not invalid for breach
I of the 1st defendant’s articles of association. The plaintiffs were thus held I
not to be validly elected as members of the EC of the CW Branch at its
J J
subsequent AGM.1
K K
3. The plaintiffs then appealed.
L L
M 4. By a summons dated 26 April 2024, the 2nd to 21st defendants, M
who were the elected members of the 16th EC pursuant to the EGM of the
N N
CW Branch held on 11 April 2023, seek security of costs in relation to the
O plaintiffs’ appeal in the amount of HK$198,600. 2 By a summons dated O
10 May 2024, the 1st defendant also seeks security of costs in relation to the
P P
plaintiffs’ appeal in the amount of HK$535,000. Both applications are
Q made on the ground that the plaintiffs are impecunious. Q
R R
5. Having considered the papers, we are of the view that it is
S appropriate to deal with the two applications based on written submissions S
T 1
The Reasons for Judgment was handed down on 2 February 2024: [2024] HKCFI 418. T
2
By the same summons, the 2nd to 21st defendants also seek to adduce new evidence as to the plaintiffs’
expiration of membership in the 1 st defendant on 30 November 2023 and 31 March 2024 respectively,
U which is not opposed by the plaintiffs. U
V V
- 5 -
A A
only, without an oral hearing, pursuant to Order 59 r14A(1) of the Rules of
B B
the High Court (RHC) (Cap 4A).
C C
Discussion
D D
6. The principles giving the Court’s exercise of the discretion in
E E
ordering security for costs of appeal under Order 59 rule 10(5) of the RHC
F are well established: F
G (1) The “special circumstances” referred to in the rule which G
justify the ordering of security include cases of insolvency or
H H
impecuniosity and difficulty or expense of enforcing an adverse
I costs order. The burden is on the defendant to demonstrate the I
plaintiff is impecunious.
J J
(2) In discharging the burden of demonstrating that the plaintiff is
K impecunious, the defendant is not expected to produce K
conclusive evidence of the plaintiff’s lack of means. It is
L
sufficient for the defendant to point to the surrounding L
circumstances or adduce some credible evidence in support of
M M
his belief that the plaintiff will be unable to pay the defendant’s
N costs. It is then up to the plaintiff to adduce such evidence as N
he thinks fit to demonstrate his means or to contradict the
O O
defendant’s evidence. The court shall decide whether a
P
reasonable person with ordinary experience of daily life would P
consider the plaintiff unable to pay such costs. The threshold is
Q just one of adducing credible evidence for the belief and falls Q
short of proof of lack of means to pay: Re Estate of Nina Kung
R R
(Security for Costs) [2023] 2 HKLRD 1221 per Cheung JA at
S [7]. S
(3) As a matter of practice, once an applicant for security can
T T
demonstrate that impecuniosity (or some other factor such as
U difficulty or expense in enforcing a costs order) exists, while U
V V
- 6 -
A A
the Court retains an overall discretion whether or not to make
B B
the order, it would then generally be up to the party resisting
C the application for security to demonstrate countervailing C
factors which would militate against such an order being made.
D D
A common countervailing factor to resist applications for
E security are the merits of an appeal. On consideration of the E
merits of the appeal, while a detailed examination is not
F required, the Court should form some sort of preliminary, even F
instinctive view. Where the merits appear to go strongly one
G G
way or the other, this may, by itself, be a decisive factor.
H However, if the Court takes the view that the appeal could H
really go either way, then generally it will look to the existence
I I
of any other factors to tilt the balance, in the absence of which
J
security will be ordered: Chung Kau v Hong Kong Housing J
Authority & Ors [2004] 2 HKLRD 650 per Ma CJHC (as he
K then was) at [14]. K
L L
7. Here, the defendants contend that based on the evidence before
M
the court, an inference ought to be made that the plaintiffs are impecunious M
and that they would likely encounter undue delay or be put to undue expense
N N
in enforcing any order for costs in relation to the plaintiffs’ appeal.
O O
st
8. The 1 defendant points to the following in support of its case
P P
of the plaintiffs’ impecuniosity:
Q (1) On the face of the evidence, it does not appear that the plaintiffs Q
have substantial assets. The 1st and 2nd plaintiffs have small
R R
paid-up capitals, being HK$10,000 and HK$1000 respectively.
S The registered office addresses of the plaintiffs do not appear S
to belong to the 1st or 2nd plaintiff on the basis of a land search
T T
conducted at the Land Registry. There are no known assets of
U
the plaintiffs. U
V V
- 7 -
A A
(2) There was no information whatsoever of any matters or
B B
information relating to the plaintiffs’ current financial position.
C There is no evidence of any business dealings, bank statements C
or even unaudited management accounts. No audited accounts
D D
of either the 1st or 2nd plaintiff were disclosed. The only
E evidence produced by the plaintiffs were of various business E
licences and certificates, which are insufficient evidence of the
F plaintiffs’ financial condition. F
G G
9. The 2nd to 21st defendants similarly point to a lack of evidence
H showing that the plaintiffs have sufficient means to pay the costs below and H
of the appeal, pointing out that the operation of the plaintiffs’ business as
I I
estate agents are as service providers and do not require owning of any assets.
J They also refer to the expiration of the plaintiff’s status as members of the J
1st defendant on 30 November 2023 and 31 March 2024 respectively and
K K
claim that they no longer have locus standi to sue and that the matter under
L appeal is in any event academic. L
M M
10. The plaintiffs, on the other hand, claim that the defendants have
N not been able to discharge the burden of establishing that the plaintiffs are N
allegedly impecunious or that this case falls under the “special
O O
circumstances” under Order 59 rule 10(5) RHC. They also claim that their
P intended appeal is meritorious and not academic. P
Q Q
11. In our view, the fact that the plaintiffs’ small paid up capital;
R that the lack of apparent ownership of assets, that the fact that the plaintiffs R
do not require the holding of any assets for the operation of their businesses,
S S
and that the complete absence of any evidence relating to the plaintiff’s
T current financial information or business returns, do cast serious doubt on T
whether the plaintiffs have means of pay an adverse costs order.
U U
V V
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A A
12. We also find it telling that when the defendants raised doubts
B B
as to the plaintiff’s ability to pay costs in correspondence, the plaintiffs have
C not produced any meaningful evidence to address their concerns. The C
plaintiffs could only assert that they were “running their business of an
D D
ongoing concern in the industry of estate agency” and that they intended to
E continue to do the same, without, however, producing any evidence or E
information of their business dealings, bank statements, or audited accounts.
F F
When the solicitors of the 1 defendant requested for copies of the plaintiffs’
st
G audited reports in the past two years to support the plaintiffs’ assertion of G
their “ongoing concern”, the plaintiffs refused to provide the same. They
H H
only produced ongoing business licences and certificates but that falls far
I short of showing that they have the requisite financial ability. I
J J
13. In our view, from the available evidence, the only reasonable
K inference that can be drawn is that the plaintiffs are indeed impecunious. K
L L
14. As to the merits (or lack of merits) of the appeal, we do not find
M them to be such as to be decisive on the issue of security for costs either way. M
N N
15. We also do not see any other factors that will tilt the balance in
O favour of not ordering security against the plaintiffs. O
P P
16. In conclusion, we find it just to exercise our discretion to order
Q the plaintiffs to pay security for the defendants’ costs of the appeal. Q
R R
17. Turning to quantum, the principles concerning the assessment
S of the quantum of security for costs are summarised in Thapa Hari Bahadur S
v Paramount Engineering & Manpower Services Ltd [2022] HKCA 1516,
T T
per Au JA at [40]:
U U
V V
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A A
(1) First, the Court normally takes a broad-brush approach and
B B
does not conduct a taxation of the respondent’s costs in fixing
C the quantum of security. Instead, the exercise on which it is C
engaged is to arrive at an appropriate estimation of the likely
D D
amount of costs which would be ordered to be paid by the
E appellant to the respondent on a party and party taxation. E
(2) Second, one of the factors to bear in mind when fixing the
F F
amount is the underlying objectives in Order 1A, rule 1 of the
G RHC, in particular rule 1(c) and (d) which highlight G
proportionality in conduct of proceedings and fairness between
H
the parties. H
I (3) Third, to facilitate the Court’s discretion on the appropriate I
amount of security, the applicant’s legal representatives must
J J
provide a realistic estimate of the time and costs likely to be
incurred in each stage of the proceedings which must bear some
K K
logical correlation to the complexity of the case and the issues
L involved. Otherwise, the Court is deprived of the assistance it L
rightly expects.
M M
18. The 1st defendant seeks the sum of HK$535,000. Having
N N
considered the complexity of the case and the issues involved, we consider
O that the estimated of the solicitors’ costs on the appeal (HK$382,800) to be O
on the high side and these should be substantially reduced. Taking a broad-
P P
brush approach, we consider that the appropriate amount of security should
Q be HK$150,000. Q
R R
nd st
19. The 2 to 21 defendants seek security in the sum of
S HK$198,600. We will also reduce this to HK150,000. S
T T
U U
V V
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A A
Order
B B
20. We therefore make the following orders:
C C
(1) The plaintiffs do pay into court within 28 days: (i) the sum of
D D
HK$150,000 as security for the 1st defendant’s costs of the
E plaintiffs’ appeal; and (ii) the sum of HK$150,000 as security E
for the 2nd to 21st defendants’ costs of the plaintiffs’ appeal.
F F
(2) The appeal is stayed until the sums are paid.
G
(3) In default of payment, the appeal is dismissed without further G
order together with costs to the 1st defendant and the 2nd to
H H
21st defendants.
I
(4) The 1st defendant and the 2nd to 21st defendants to have the costs I
of their present applications, summarily assessed, respectively
J J
at HK$80,000 and HK$80,000.
K K
L L
M M
N N
(Jeremy Poon) (Aarif Barma)
Chief Judge of the Justice of Appeal
O O
High Court
P P
Written submissions by Mr Thomas Yeon, instructed by Christine M Koo
Q & Ip, Solicitors & Notaries LLP, for the 1st and 2nd plaintiffs Q
Written submissions by Mr Joseph Wong, instructed by Li, Kwok & Law,
R R
for the 1st defendant
S Written submissions by Ms Kitty Tsang, instructed by Paul Kwong & Co. S
for the 2nd to 21st defendants
T T
U U
V V