SUN CROWN TRADING LTD v. HOLYROOD LTD

HCA1158/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1158 OF 2007

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BETWEEN

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R U L I N G

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1.  The only issue on this summons is the amount of security that should be provided by the plaintiff in this action. There is no suggestion, happily, that to order security now - and when I say “now” I refer to the fact that this is, by any standard, a late application for such an order - would stifle the action. Happily those who back the plaintiff have sufficient funds to meet any order that I make, including one that leaves the defendant’s estimate of $ 2.47 million undisturbed.

2.  But I am not going to do that.  I should be awarding less security than that, of course.  And I think Mr Wilson Chan recognises this. And so turning to quantum, the court, in making its assessment, is enjoined to apply a broad-brush to this canvass.  It should not indulge in some sort of mini taxation.  That is left to a future occasion before the Taxing Master. This bill of costs - and for the purposes of this ruling I am looking at a table which has been prepared and handed up this morning, very helpfully if I may say so, by Mr Wilson Chan who has tried, in addressing this matter, to present as reasonable position as he feels is consistent with his client’s interests.  The result is that he is pressing for an order of, in round figures, $1.9 million. 

3.  Now, that still leaves a very large gulf between him and Mr Yeung, who appears for the plaintiff, who says I should make an order which does not exceed $1 million.  Looking at this table I think it can be looked at in two parts, (i) to (iii) which, taking the third column which is the most advantageous to the plaintiff, comes to $1.178 million.  That, I think, is much more amenable to taxation.

4.  The remainder of the table, from (iv) and (v), which substantially deals with disbursements in the sense of counsel’s fees and supplemental fees incurred for an expert to prepare a further report and for the expert’s attendance, those fees usually would not attract very much of a reduction as a result of taxation.  I am mindful of that. 

5.  But Mr Yeung has made one or two points that I think need to be addressed in the analysis.  He says this case was estimated to last 15 days on the basis that there were three actions.  The Master had originally given an order that they should be tried one after the other, everyone doing their best, five days per action.  That can only be an estimate. 

6.  But now, of course, one of the plaintiffs has dropped out, so I am left with dealing with two actions.  And, not unreasonably, Mr Yeung says, “Well, this is only going to last 10 days.  It should not last 15.”  I think he is being too optimistic, and I wish he were right.  But my experience is, especially in a case like this, that one does get into the minutiae of the complaints that are made.  I mean this can all be rather time consuming. 

7.  The other point, that militates against this case only lasting 10 days rather than 15 is, as Mr Wilson Chan points out, the cases have grown since these estimates were given. I have allowed pleadings to be amended.  Complaints have therefore enlarged.  They have had to be met with supplemental experts’ reports and so forth.  And so the material has grown.  And I take the view that if one is put to it I would have thought that the full 15-day estimate is likely to hold good, the original estimate, even though there are now only two separate actions which I will hear together.  I have already given this direction because of the common features.  And that would be the convenient way to go about it. 

8.  As a rule of thumb, overall the courts doing their best in employing this broad-brush approach - and by that it does not mean that the court is taking its duties lightly - one has got to condescend to the particulars and the detail of it before applying the broad-brush.  But the court’s approach is usually to say a third off the defendant’s estimate of its costs to have regard overall to the incidence of taxation, and also to have some consideration for the fact that the action may settle.  But I think that that is usually said where there is a timely application for security for costs.  By that I mean if it is an early application. 

9.  Here, as it is a late application, the parties are now ready for trial -- I mean they have got their suits of armour on.  We are going to be hearing the case within the next few days, and it really looks as if settlement is unlikely.  And so I do not think I ought to provide anything in respect of that likelihood.  I think at this stage it is rather fanciful.  But I express the hope that the parties may find some accommodation between them, especially in view of the fact that the plaintiff, looking at it commercially in this particular action at least, has sold the flat at a very considerable profit.  But, anyway, I leave that to the parties.

10.  What I have concluded is - and I am not going to do this in any mathematically precise way, although of course the order will be a precise figure - is to say that really Mr Wilson Chan’s approach is the one to be preferred overall.  He says $ 1.9.  It is a little under that.  But I think one should make some further inroads into this, even leaving items under (iv) and (v) effectively intact.  I really think that it is (i) to (iii) which ought to suffer some reduction.  And so overall I take the view that the correct security that should be provided is a figure of $1.6 million.  And that, Mr Yeung, your client is able to provide that within seven days.  Do you think that will be all right?

(Discussion re provision of security)

11.  I am going to say that security should be provided no later than Wednesday, 31 August. And this is to be paid into court. 

(Discussion re calculation of security)

(Discussion re costs)

12.  I think there are a number of features here which bear on costs.  Although it has not figured substantively on the decision, I think this delay is something that I am entitled to take into consideration, and the defendant is culpable in that regard, and am I going to reflect this in costs.  The point obviously is that Mr Wilson Chan has had the best of the day.  He has had to come to get 1.6 million.  He had been offered $ 1.5, and that is the basis for asking for costs in any event.  But the fact is that this issue of delay does trouble me, that the plaintiff has now been distracted by all of this when everybody should be concentrating on final preparations for trial.

13.  What I am going to say is that these costs should be defendant’s costs in the cause.