CHENG HANG CHU AND OTHERS v. CHINA TREASURE ENTERPRISE LTD.

CACV 111/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 111 OF 2000

(ON APPEAL FROM HCA NOS. 7145 AND 7702 OF 1999)

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(ON APPEAL FROM HCA NO. 7145 OF 1999)

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J U D G M E N T

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1. The Plaintiffs obtained judgment in the Court of First Instance against the Defendant in two separate actions. The Defendant is appealing to the Court of Appeal. The Plaintiffs now apply for security for their costs of the appeal. Those costs are estimated to be $314,167.00. The application is made on the basis that the Defendant has no assets in Hong Kong, and that the Plaintiffs would not be able to enforce any order for the costs of the appeal made in their favour.

2. The evidence on which the Plaintiffs rely is that the Defendant, though incorporated in Hong Kong and therefore with a registered office in Hong Kong, does not carry on business in Hong Kong. The Plaintiffs' claim was for the enforcement in Hong Kong of arbitration awards made on the mainland against the Defendant in relation to agreements for the sale and purchase of property in, I assume, Guangdong, for which the Defendant had been one of the developers. All the indications are that the Defendant has no assets in Hong Kong. If it has, it has not said so because it has not filed any evidence in opposition to the Plaintiffs' summons.

3. I am satisfied that this is an appropriate case for an order for security for costs. However, the estimated bill of costs which has been exhibited does not take into account the incidence of taxation, despite the statement in the Supreme Court Practice 1999, Vol. 1, p. 1070 that the estimated bill of costs "should not show solicitor and own client costs, but should set out the costs which could reasonably be expected to be allowed on a taxation on the standard basis". In addition, there are items in the estimated bill of costs which I doubt will be allowed on taxation or even be incurred. For example, a fee of $20,000.00 to junior counsel for taking judgment is not merely excessive, but will not be incurred at all if the court either gives an ex tempore judgment or hands the judgment down later. In my opinion, a much more realistic figure for the Plaintiffs' estimated costs, taking into account what the Plaintiffs are likely to be awarded after taxation, is $160,000.00.

4. Accordingly, the order which I make is that, until the Defendant provides security for the Plaintiffs' costs in that amount, the Defendant's appeal be stayed, and that if such security is not provided within 14 days of today, the Defendant's appeal will be struck out.