KAMLA SUJANANI or KAMLA LAVINIA SUJANANI v. MIDDLE EAST FINCANCE INTERNATIONAL LIMITED

IN THE COURT OF APPEAL

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JUDGMENT

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Kempster, J.A.:

1. On 8th October of this year, after consideration, Mayo, J. made a Receiving Order against Madam Kamla Sujanani on the petition of Middle East Finance International Limited. Notice of Appeal against that Order was given on 29th October and on 19th November a Respondent's Notice was filed.  In the meanwhile, advertisement of the Receiving Order was and remains stayed by order of the Court.

2. It is apparent from the argument that has been addressed to us on the present application for security for the cost of the appeal both that interesting questions of law relating to the burden of proof in the context of section 9(3) of the Bankruptcy Ordinance may well arise and that, since the attitude of the debtor at the hearing before Mayo, J. was that no Receiving Order should be made in the exercise of the judge's discretion because her assets were insufficient to provide a 15 percent dividend for the unsecured creditors, she will not herself be able to meet the respondents' costs of the appeal if she is unsuccessful. Prima facia, therefore, this Court is bound to exercise its discretion to make an order for security and, despite Mr. Ma's valiant attempts to pursuade us to consider what he regards as the debtor's excellent prospects in the appeal, we feel there is no real argument to the contrary. The only issue is as to quantum.

3. The petitioning creditors, by their solicitors, have prepared a skeleton bill of costs which amounts to $64,000 including disbursements. We are reminded by the persuasive authority of the English Court of Appeal in Procon (GB) Ltd. v. Provincial Building Co. Ltd. and others ⁽¹⁾ that we should not apply any automatic discount as a matter of practice. However, we do have to make allowance for the normal processes of taxation and have considered the contents of the skeleton bill of costs. Certain items suggest that solicitors are proposing to assume burdens by way of research usually assumed by or imposed on counsel.

4. In all the circumstances we think that the appropriate figure for security for costs is $40,000. Accordingly we order that such sum be secured either by payment into Court or by provision of a bank or other guarantee to the satisfaction of the Registrar within 14 days from today's date.  We impose that time limit because we are told that the appeal will be coming on for hearing shortly. There will be liberty to apply in case there be any need for an extension of time and if $40,000 is not secured within 14 days or such further time as this Court may allow the appeal will stand dismissed.

(1)    [1984] 2 All E.R. 368