XCHRX KAREX (HONG KONG) LTD. v. FORTUNE TALENT DEVELOPMENT LTD.

CACV No. 116 of 1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. CACV 116 OF 1999

(ON APPEAL FROM HC NO. 7422 OF 1998)

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J U D G M E N T

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1. This is an application by the 1st Defendant for security for costs. It is well established that the position in relation to security for costs is different on appeal. That, to some extent, may not be quite the position here because it is an interlocutory appeal. Nonetheless, I cannot accept the basis of Mr. Mak's submission that the 1st Defendant is precluded from applying for further costs upon the basis of his view of the application ofGordano v. Burgess reported in 1988 1 WLR 890.

2. I am satisfied that the 1st Defendant is entitled to apply for security for costs and that the only real question here is the amount of the security that should be ordered. I have to confess that I find myself in considerably difficulty in approaching the matter, for the nature of the issues involved in this interlocutory appeal are said to go only to that part of the Statement of Claim which has been struck out. I do not know the nature of that part; it is said to be concerned only with questions of law that are not in dispute. Nor am I told upon what basis the competing submissions are placed and in particular whether the Respondent's notice as it originally emerged is to be filed but counsel has given me an undertaking that the Respondent's notice will be filed. Again, I do not know the scope of that Respondent's notice.

3. At the end of the day, doing the best I can, I bear in mind that the Defendants could have been much more forthcoming in indicating to me what the nature of the grounds were going to be, likewise the scope of their defence to the appeal and the scope of the Respondent's notice; all of those, I have simply to guess at. I assume that if the appeal goes entirely to questions of law, that the only scope for a Respondent's notice would be the factual basis of those questions; again of that I am given no indication whatsoever.

4. So coming back to doing the best I can, having looked at the skeleton bill of costs, it seems to me that the draftsman himself may be a bit in the dark as to what is involved because of the bare references to some of the larger items. Likewise the supporting affidavit does not reveal their nature. So taking a broad view, from the matters agreed, the estimate of the hearing time at one day and that senior counsel of some standing are to be briefed, their names having been mentioned, it seems to me that a substantial discount should be applied. The total in the skeleton bill is about $360,000.00. This figure was given to me helpfully by Mr. Chung.

5. What is asked for upon the basis of that is $320,000.00 as security which represents a discount of about 11%. I am not too impressed by this. It seems to indicate an acceptance that the bill is inflated. I think in all the circumstances that an amount of $230,000.00 would be realistic and that is the amount I have settled for.

6. Accordingly, I order security for costs to be provided in the sum of $230,000.00. That is a substantial amount but I have come to notice that appeals in which senior counsel appeal do result in substantial costs of such order.