10. If the defendant wins the case, his legal costs may be recovered from the plaintiff. What can the defendant do if he is worried that, in the event of defeating the plaintiff's claim, the plaintiff would be unable to meet any order for legal costs made at the trial?
In such a case, the defendant may consider making an application for the plaintiff to provide security for costs.
If the application is granted, the plaintiff will be required to pay a specified sum of money into court (similar to a deposit) within a specified period. Normally, the proceedings will be temporarily halted until the plaintiff complies with the order for the payment of security for costs. In the event of the defendant being successful in defeating the plaintiff's claim, the money paid by the plaintiff can be used to settle the defendant's legal costs.
The defendant can rely on any of the following grounds to make the application:
- the plaintiff is ordinarily resident out of Hong Kong;
- the plaintiff, not being a plaintiff who is suing in a representative capacity, is a nominal plaintiff who is suing for the benefit of some other person and there is reason to believe that he will be unable to pay the costs of the defendant if ordered to do so;
- the plaintiff's address is not stated in the writ or other court documents or is incorrectly stated there (unless the court is satisfied that the failure to state the address or the misstatement was made innocently and without intention to deceive);
- the plaintiff has changed his address during the course of the proceedings with a view to evading the consequences of the litigation; or
- if the plaintiff is a limited company registered in Hong Kong or a company incorporated outside Hong Kong, the defendant can use section 905 of the Companies Ordinance (Cap. 622 of the Laws of Hong Kong) – i.e. "if it appears on credible testimony that there is reason to believe that the company will be unable to pay the costs of the defendant if successful in his defence".
This application is made in chambers (not in open court) by means of a summons. Before making this application to the court, the defendant should send a written request to the plaintiff asking for the security payment. The defendant should prepare an affidavit or affirmation to support the application.
However, no affidavit/affirmation is necessary if the grounds upon which the defendant relies is the fact that the plaintiff is ordinarily resident out of Hong Kong and that fact is stated on the writ. The summons or affidavit/affirmation should indicate the amount of security required, and a skeleton bill of costs (a detailed list of all the relevant items) should be prepared to show how that amount is made up.
Although this application may be made at any stage of the proceedings, it should not be made too late or too close to the trial. This is because any delay may count against the defendant when the court considers the application.