XCHRX WIDEARTH TEXTILE LTD. v. APOLLO G & T INDUSTRIAL CO., LTD.

1996, No.A7081

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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1. This is an appeal against an order of Mr Registrar Betts given on 5th December 1996 ordering that the defendant's application for security for costs be dismissed with costs of the application to the plaintiff.

2. This is a hearing de novo and the power to grant an order for security for costs is a discretion entirely within the authority of the court. It is however a discretion which must be exercised judicially. I am referred by the defendant who is the appellant herein to the case of Aeronave SPA and Another v. Western Charters Limited and Others [1971]3 All ER 531. Suffice it to say that the ratio of that case was set out in the headnote and reads:

"Although it is not an inflexible rule, but the matter of discretion whether a foreign plaintiff showing in an English Court would be ordered to provide security for costs. It was the usual practice to do so if the justice of the case demanded it."

3. I am urged by Miss Peck for the respondent in this appeal that the plaintiff in this action has a strong case and I accept on the law pertains to letters of credit that she is correct.

4. An assertion was made by Ms Liang in her affidavit in support of this matter and in support of earlier application that there is an arguable defence in respect of this claim on the basis that the defendant were the applicants for the letter of credit on a commission basis and that the underlying contract between the parties in this action was not between this plaintiff and this defendant.

5. That being so, I must look to the overall interest of justice to ascertain the manner in which the discretion ought to be exercised. It is very fairly and properly conceded by Miss Peck that the plaintiff in this matter is a foreign plaintiff. Its company's offices are situated in Taiwan and I accept that there is no reciprocal agreement between Hong Kong and Taiwan for the enforcement of judgment.

6. It is affirmed in an affirmation by Ms Liang that the plaintiff has no assets within this jurisdiction. Whilst that was not conceded in argument by Miss Peck there has been no affirmation filed to indicate that there either are assets within the jurisdiction or that the assertion affirmed to by Ms Liang is incorrect. That being so, it would seem to me that the skeleton bill properly supports the quantum of costs in the sum of $68,000 and notwithstanding the fact that it is a low sum in comparison of the amount claimed in the writ, the interest of justice are to be properly served by ordering that security for costs in the sum of $68,000 be given by the plaintiff to the defendant.

7. The appeal is allowed, the order of Mr Registrar Betts given on 5th December 1996 ordering that the defendant's application for security for costs is dismissed. The costs of the application to the plaintiff is set aside and I order that the plaintiff gives security for the defendant costs in this action in the sum of $68,000 and that until such security for costs shall have been given all further proceedings on this matter be stayed.

8. The matter of payment for security for costs shall be by payment into court of the sum of $68,000 to be paid into court within 28 days of the date hereof. Costs of this appeal and the costs for the sum of security be costs for the defendant to be taxed if not agreed.