INTELLIGENT HOUSE LTD v. CHAN TUNG SHING AND OTHERS

CACV 190/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 190 OF 2008

(ON APPEAL FROM LDCS NO. 11000 OF 2006)

----------------------

----------------------

 

-----------------------------

D E C I S I O N

-----------------------------

 

1.  This is an application for security for costs.  The litigation is somewhat odd.  Much of the history has been set out in reasons for judgment of Tang VP handed down on 27 August 2008. 

2.  It would appear that the 13^th Respondent in this case bought a unit at a very late stage, when it was well aware that the particular premises were to be redeveloped by the Applicant who had 92.31 per cent.  The 13^th Respondent, having invested some $2½ million into the venture of buying this small part of the building, which apparently was about 2.7 times the value of that apartment, then resisted the application in the Lands Tribunal, a matter which went on for some 10 days.

3.  As a result, the Lands Tribunal ordered the sale of the building.  The 13^th Respondent’s share of the proceeds was slightly under $2 million.  That has been retained by the Applicant’s solicitors under an order of the court on the basis that the costs before the Lands Tribunal have not been paid.  There is an application for a stay which came before the Vice President in August.  He set aside the stay which had been ordered by the Lands Tribunal, and hence the building was sold.

4.  Quite what the 13^th Respondent is likely to obtain out of any appeal other than a decision on the law, which apparently is arguable rather than anything else, and perhaps a reversal of the costs order, I do not know.  Nevertheless, applying the normal principles, the 13^th Respondent is a $1 company and has seemingly no other assets.

5.  This application is put on the basis that the Applicant will be employing London counsel.  I have no comment as to that.  I am well aware that the London counsel is a very eminent counsel and no doubt entitled to charge the fees which are being sought.  However, I have to look upon this as a matter of security for costs in a reasonable amount.  What I have to do is to decide whether it would seemingly be possible for the Applicant to employ a local counsel and what a likely rate would be.  In my view, I would be generous in estimating the total cost of an appeal like this at $1 million on the basis of perfectly competent counsel undertaking it.  As I say, that is no reflection on the fees which are being sought in respect of the London counsel.

6.  So what I propose to do is to make an order in the usual form, and that is that:

(1)    the 13^th Respondent do, on or before 16 February 2009, give security to answer costs in case any shall be awarded to be paid by the 13^th Respondent to the Applicant, by making lodgment in court of the sum of $1,000,000 by cash or bankers draft, or by a provision of a bank guarantee of the like amount, which guarantee shall have been approved by the Registrar; and until such lodgment be made and notice thereof given to the Registrar and to the Solicitors for the Applicant (such notice to be given on the same day as the lodgment is made) all proceedings in the said appeal are to be stayed;

(2)    in default of the 13^th Respondent making such lodgment 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 Applicant 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 13^th Respondent do pay to the Applicant its costs occasioned by the said appeal such costs to be taxed; and

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