TAN KAH ENG v. THE EXECUTORS OR INTENDED EXCUTORS OF THE ESTATE OF TAN ENG KHIAM, DECEASED

HCA9640/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 9640 OF 1999

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BETWEEN

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D E C I S I O N

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1.  I have before me an application for further security for costs of the upcoming trial in these proceedings. Two separate applications for security for costs have already been made in these proceedings; once when the defendant appealed against the order of Deputy Judge To, as he then was, to the Court of Appeal. On that occasion, the plaintiff applied for security of costs of the appeal, and was awarded security for costs, notwithstanding the rather eloquent plea of Mr John Ip, who then had the boot on the other foot, so to speak, of the ease with which Hong Kong parties can enforce orders for costs in Singapore. Notwithstanding that, Cheung JA ordered security to be furnished by the defendant.

2.  I should preface these reasons by noting that both parties before me are resident in Singapore.

3.  Faced with that result, when it was Mr John Ip’s turn to apply, on behalf of his client, for security for costs of the trial, the plaintiff’s previous solicitors did not seriously oppose the application that security ought to be provided, although he did submit that the application was made late; but the thrust of his opposition went to the quantum of the security to be ordered and he made a very good submission to Deputy Judge Carlson that the court should exercise its discretion to order sufficient security, not full security, and that is what Deputy Judge Carlson in fact did. 

4.  The learned Deputy Judge saw a very modest skeleton bill of costs which he could not fault, either in terms of the time anticipated for preparation, and for trial, or in terms of the fees of the legal representatives conducting the trial.  He had regard to the total skeleton bill, which came to $740,000, and ordered security to be provided in the sum of $650,000.  That decision was not appealed against and, although it took some time for the security to be furnished, the amount ordered to be paid was finally paid into court. 

5.  What brings the parties to court before me are the costs arising from certain applications that have been heard since the order of Deputy Judge Carlson made on 5 February 2010.  These proceedings were a number of interlocutory applications which have resulted in what I may call final costs orders being made against the plaintiff in favour of the defendant. 

6.  On 14 March 2011 and 4 May 2011, I ordered that the plaintiff pays the costs of the defendant’s application, by way of summons, to strike out the action, and of the hearings on 11 August 2010, 16 August 2010, 23 August 2010, 3 September 2010, 8 February 2010 and 10 February 2010, to the defendant in any event.

7.  The orders I had made are the subject matter of an appeal to the Court of Appeal which, I understand, will be heard at the end of October this year.  However, I am informed, and I accept, that these specific costs orders are not the subject matter of any appeal and to that extent, of course, they are final orders.

8.  These orders have brought about a change in the situation in that the plaintiff is burdened with having to pay these costs, in any event, to the defendant and that is what has prompted the application for further security to cover these costs orders.

9.  Mr Sherry makes a very valiant attempt to resurrect the submission in relation the reciprocal enforcement arrangement between Singapore and Hong Kong, which he says makes it very easy for the defendant to enforce costs orders in Singapore, if it comes to that, and he also directed my attention to the observations of Lord Justice Mance, as he then was, in Nassar v United Bank of Kuwait [2002] 1 WLR 1868, at paragraph 64 on pp 1885 to 1886 :

“64. The courts may and should, however, take notice of obvious realities without formal evidence. There are some parts of the world where the natural assumption would be without more that there would not just be substantial obstacles but complete impossibility of enforcement; and there are many cases where the natural assumption would be that enforcement would be cumbersome and involve a substantial extra burden of costs or delay. But in other cases – particularly other common law countries which introduced in relation to English judgments legislation equivalent to Part I of the Foreign Judgments (Reciprocal Enforcement) Act 1933 (or Part II of the Administration of Justice Act 1920) – it may be incumbent on an applicant to show some basis for concluding that enforcement would face any substantial obstacle or extra burden meriting the protection of an order for security for costs. Even then it seems to me that the court should consider tailoring the order for security to the particular circumstances. If, for example, there is likely at the end of the day to be no obstacle to or difficulty about enforcement, but simply an extra burden in the form of costs (or an irrecoverable contingency fee) or moderate delay, the appropriate course could well be to limit the amount of the security ordered by reference to that potential burden.”

10.  The point about ease of enforcement in Singapore has not been taken for the first time in these proceedings; it has been taken in the past, and was taken before Waung J in World Fuel Singapore Limited v The Owners of MV Liberty Container HCAJ135/2003. Reference to that case was also made by Deputy Judge Muttrie in T v Li Wai Yin, Elvis HCPI 878/2003 where the same point had been taken.

11.  In both cases, the court took into account the ease of enforcement in Singapore but Deputy Judge Muttrie, nevertheless, ordered security to be provided.  Waung J did not order security to be provided largely because the plaintiffs had an overwhelmingly good case.

12.  The ease of enforcement in Singapore is a factor to be taken into account in the exercise of the court’s discretion but the more constricting factor that I face arises from the fact that I have here before me an order of Deputy Judge Carlson ordering security for costs to be furnished, an order that stands and which has not been appealed against.  I certainly do not want to appear to be sitting on appeal from his decision, and I feel compelled to exercise my discretion in a manner which is consistent with the exercise of his discretion in this same case.

13.  Of course, I do take into account all the submissions made to me by Mr Sherry in relation to reciprocity and the ease of enforcement in Singapore.  I also take into account the fact that the skeleton bill of costs that was before Deputy Judge Carlson is no longer current to the extent that the anticipated length of trial is now four days, not five, and that, I think, will equate to a saving of some $60,000, and, by reversing the discount made by Deputy Judge Carlson, ought to give a credit of some $75,000 to the defendant from the amounts now paid into court.

14.  I have also carefully looked at the skeleton bill of costs, prepared in relation to the costs orders that I had made in favour of the defendant, in the total sum of $545,000.  I do not see anything in that bill that causes me concern but even taking a rather strict approach, by assuming that the taxing master will tax off some 20 per cent of that bill, we still have a position here where I think I ought to give security for costs in the sum of about 327,000. 

15.  Of course that is a mathematical approach which I ought not to take.  I ought to take a broad view of the matter and also make a further discount because of the ease of enforcement point. 

16.  Having considered all these matters, and not receiving any submission from Mr Sherry that the further security that I order would stifle the case or prevent it from seeing trial, I am minded to order additional security in the sum of $300,000 and that is the order I propose to make.

17.  I have also heard counsel on the costs order that I should make.  I am not persuaded that I ought to make any other order than that was made by Deputy Judge Carlson, which is that the costs of this application be the defendant’s costs in the cause. 

18.  I think what now remain for me to deal with is, firstly, directions for trial, and also when this further security should be paid.  Should I not order it to be paid a certain time after the decision of the Court of Appeal? 

[After further submissions]

19.  Very well, I do give further directions in this case that the former pleadings stand as the pleadings in this case and that the witness statements previously filed by the parties stand as the witness statements in these proceedings; that no further other evidence, either of fact or of experts, be filed without leave of court; that the plaintiff do set this case down for trial on the fixture list within 14 days from today, for trial to commence on 25 November 2011, with 28 to 30 November 2011 also reserved.

20.  The last order I make is that additional security be provided in the sum of $300,000 by payment of that sum into court either 14 days after the result of the Court of Appeal hearing is known or no later than 11 November 2011, whichever is earlier.

21.  It remains for me to thank counsel for their helpful and interesting submissions.