SHUN KAI CO LTD (In Compulsory Liquidation) AND OTHERS v. JAPAN LEASING (Hong Kong) LIMITED (In Creditors' Voluntary Liquidation)

cacv 323/2008

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 323 of 2008

(on appeal from HCA NO. 13826 of 1998)

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D E C I S I O N

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1.  This is an application for security for costs on appeal in what might be said to be a very long-running case I have to say that because of the length of time this case has taken, it had slipped my mind that it had in fact come before this court before, some years ago, although I have to say the names of the parties did ring a bell; but on the other hand, I did not know how much other litigation the various parties were involved in.  Be that as it may, the matter before the court below was a strike-out application.  It is of some importance to the Defendants, since they succeeded, that they should hold the judgment.  Clearly, it would involve them in a great deal more costs, and no doubt a great deal has already been spent, if the case were to carry on.  Therefore, it is not surprising that they wish to instruct leading counsel, who, I am told, has been involved in the case all along, to appear on this appeal.

2.  The 3rd Plaintiff, against whom the security is sought, does not challenge the fact that security should be given, but challenges the amount and asks for an extension of the usual 28 day period for providing that.

3.  As regards the amount, Ms Cheng, who has appeared on behalf of the Defendant, has suggested that this court might reduce the amount sought on security by an amount which would bring it down to about $360,000, and in my view, given the fact that leading counsel will be involved in this case, I consider that amount reasonable.

4.  Points have been made about whether or not too much work is being done by the solicitor in charge of the case.  In my view, that is a difficult point, because there is no partner involved, and therefore the senior associate, who will be handling the case, will have to - I would not say have to take more care - but he will be less experienced than a partner.  Whereas a partner may, using his experience, be able to delegate more, a senior associate would no doubt have to keep more of the work in his own control, and hence I am not prepared to adjust the amount to any significant extent, particularly since this has to be a fairly broad approach.

5.  Hence I consider that the amount now asked for in the sum of about $360,000 is reasonable for the security for costs.

6.  As to the time, I am told that the appeal has not yet been set down, and so no date has been fixed.  If I order security to be provided, there is no question of the date being fixed, and therefore counsel’s diary will not be blocked if, in the end, security is not provided.

7.  Therefore, on that basis, given the circumstances of the case, I am prepared to extend the time to 6 July for the provision of the security.

8.  The order that I will make is in the standard form which I have given the parties, and so it will be that:

(1)       the 3rd Plaintiff do on or before 6 July 2009 give security to answer costs in case any shall be awarded to be paid by the 3^rd Plaintiff to the Defendant by making lodgement in court of the sum of $360,000 by cash or banker’s draft or by the provision of a bank guarantee of the like amount which guarantee shall have been approved by the Registrar, and until such lodgement be made and notice thereof given to the Registrar and to the solicitors for the Defendant, such notice to be given on the same day as the lodgement is made, all proceedings in the said appeal are to be stayed;

(2)       in default of the 3rd Plaintiff making such lodgement as aforesaid within the time specified above or within such further time as the court may, for special reasons allow, the said appeal do, upon the solicitors for the Defendant certifying such default to the Registrar, stand dismissed out of this court without further order;

(3)       in the event that the appeal is dismissed in the circumstances provided for above, the 3rd Plaintiff do pay to the Defendant its costs occasioned by the said appeal, such costs to be taxed; and

(4)       the costs of this application be costs in the appeal.