XCHRX THE TANG HE (PRC flag)

HCAJ 123/1997

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY JURISDICTION

ACTION NO. 123 OF 1997

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Admiralty Action in rem against:
the ship or vessel "TANG HE" (PRC flag)

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J U D G M E N T

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1. This is an application by the Defendants for security for costs against two out of the three Plaintiffs in this action who are alleged to be cargo owners on board the ship "California Luna" which suffered a collision with the Defendants' vessel.

2. The party most likely to be responsible for the collision was probably the Defendants as indicated in a Marine Enquiry Report. But the reason that the Defendants are seeking security for costs in this action is that out of the three Plaintiffs identified in paragraph 3 of Mr. Chung's affidavit, Loyd and Wald are foreign Plaintiffs whereas Sunlight China Products is a Hong Kong Plaintiff.

3. It is to be noted that under paragraph 3 of Mr. Chung's affidavit, Loyd is claiming in relation to the cargo under bill of lading NYKS480425177, Wald is claiming as owner of two cargoes under bill of lading nos. NYKS480425156 and NYKS480425165, whereas Sunlight China Products, the Hong Kong Plaintiff, is claiming in relation to the cargo under bill of lading no. NYKS480425170. So this is a case of three separate Plaintiffs suing in relation to separate cargoes and therefore under separate causes of action. This is not a case of co-plaintiffs suing in relation to one cargo.

4. The case of the Defendants for security for costs is a simple one. In relation to the two foreign Plaintiffs, there should be security for costs and that the usual rules should apply. Mr. Amos for the Plaintiffs, tried to persuade the court that a special discretion should be exercised and he referred to the overwhelming case on the collision aspect. But it seems to me very clear from the affidavit material before me that he cannot show an overwhelming case of the two foreign Plaintiffs in relation to title to sue. In fact, no documentation had been put before me to demonstrate even an arguable case of a good title to sue. All I have is an assertion on affidavit that the Plaintiffs are the owners. So it seems to me that this is plainly a case where I should order security for costs against the two foreign Plaintiffs, namely Loyd and Wald.

5. As for quantum, it seems to me that instead of ordering security for the whole amount of the security up to the end of trial, it will be far more sensible to order security up to the stage of discovery. The estimate of Defendants' costs exhibited to Mr. Peter Chung's affidavit shows the total costs of the Defendants up to the stage of close of discovery is HK$230,000.00. This seems to me to be extraordinarily high and of course the costs claimed there is in relation to all three Plaintiffs. In my view, an appropriate security to be given by the two foreign Plaintiffs in relation to their claims up to the stage of end of discovery would be the sum of HK$100,000.00. The costs of the application for the security for costs will be borne by the two foreign Plaintiffs in any event.