CHINA SMART PROPERTIES LTD. v. MANSON HOLDINGS LTD.

HCA 13913/1997

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 13913 OF 1997

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REASONS FOR JUDGMENT

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Background

1. In this action, the Plaintiff was the purchaser under a Sale and Purchase Agreement dated 27 October 1997 under which the Plaintiff agreed to purchase the property known as No. 16 Hennessy Road, Hong Kong at the price of HK$23.6 million. The Defendant was the vendor. A deposit in the sum of HK$2.36 million was paid by the Plaintiff. Completion was, under the agreement, scheduled to take place on 15 December 1997. However, due to a mistake in the initial instruction for split cheques given by the solicitors for the vendor, a cashier order made in favour of the wrong person was tendered by the Plaintiff for the purpose of completion. As a result, completion did not take place as scheduled. The Plaintiff contended that time being of the essence, and it had all along followed the instructions of the solicitors for the vendor as to the preparation of cheques, it was entitled to complete on 15 December 1997, more specifically it was entitled to possession of the property on that day. On the other hand, the Defendant said that the Plaintiff and its solicitors were aware of the mistake in the split cheques instructions given by solicitors for the vendor and the Plaintiff should not take advantage of that.

2. In the morning of 16 December 1997, solicitors for the Plaintiff wrote to solicitors for the Defendant in the conveyancing transaction to call off the deal. Basically, what they said was that because time was in every respect of the essence under the agreement for the sale and purchase, the purchaser was under no obligation to postpone the completion. By reason of the refusal of the vendor to accept the purchase price tendered in accordance with the wrong split cheques instructions and the demand by the vendor for the correct cheques to be sent at or before noon on 16 December 1997, the purchaser said that the vendor had evinced an intention not to be bound by the agreement and repudiated the same. By the letter in the morning of 16 December 1997, the purchaser purported to accept that repudiation and demanded the return of the deposit in the sum of HK$2.36 million.

3. On 19 December 1997, the Plaintiff commenced the present action. I was told that trial dates has been fixed for a six-day trial at the end of May this year. Before the case was set down for trial, the Defendant applied by a summons dated 13 June 2001 for security for costs against the Plaintiff pursuant to section 357 of the Companies Ordinance. That application was heard by Master Rogers on 26 November 2001. By his decision made on 7 December 2001, the Master ordered the Plaintiff to pay into court within 14 days the sum of HK$660,000 by way of security for the defendant's costs of the action. The Master also stayed all the proceedings in the action in the meantime.

4. Against that decision, the Plaintiff appealed by way of a Notice of Appeal dated 20 December 2001. The appeal came before me on 1 March 2002. Both parties have filed further evidence since the hearing before the Master and at the beginning of the appeal it was agreed by the parties that leave should be granted for the use of those affirmations for the purpose of the appeal. I granted leave accordingly.

5. The Plaintiff took a rather different position before me as compared with the position they took before the Master. Since the appeal is by way of rehearing, they were at liberty to do so. At the hearing before me, Mr Kenny Lin who appeared on behalf of the Plaintiff took 3 points :-

(a) the Plaintiff has a very good prospect of success in the action;

(b) there was considerable delay on the part of the Defendant in making the application for security for costs and the Plaintiff has suffered prejudice;

(c) due to the financial impecuniosity of the Plaintiff, any order for security for costs would stifle the Plaintiff's claim. Mr Lin submitted that these factors, either considered individually or taken together, should result in the dismissal of the Defendant's application for security for costs.

Relevant Principles

6. Before I deal with the submissions of Mr Lin, it would be useful to remind myself as to the principles with regard to the exercise of discretion in an application for security for costs. A useful summary can be found in the judgment of the Court of Appeal in Wing Hing Provision, Wine & Spirits Trading Co. v Hanjin Shipping Co. Ltd [1998] 4 HKC 461 at page 464 B-F. Godfrey JA (as he then was) adopted the summary of the principles set out in the judgment of Peter Gibson LJ in the case of Keary Developments Ltd v Tarmac Construction Ltd [1995] 3 All ER 534 at page 539-540. I quote as follows:

"1. The court has a complete discretion whether to order security, and accordingly it will act in the light of all the relevant circumstances.

2. The possibility or probability that the plaintiff company will be deterred from pursuing its claim by an order for security is not without more a sufficient reason for not ordering security.

3. The court must carry out a balancing exercise. On the one hand it must weigh the injustice to the plaintiff if prevented from pursuing a proper claim by an order for security. Against that, it must weigh the injustice to the defendant if no security is ordered and the defendant finds himself unable to recover costs from the plaintiff in due course.

4. In considering all the circumstances, the court will have regard to the plaintiff company's prospects of success. But it should not go into the merits in detail unless it can clearly be demonstrated that there is a high degree of probability of success of failure.

5. The court may order any amount up to the full amount claimed by way of security, provided that it is more than a simply nominal sum; it is not bound to order a substantial amount.

6. Before refusing to order security on the ground that it would unfairly stifle a valid claim, the court must be satisfied that, in all the circumstances, it is probable that the claim would be stifled. There may be cases where this can properly be inferred without direct evidence. The court should consider not only whether the plaintiff company can provide security out of its own resources to continue the litigation, but also whether it can raise the amount needed from its directors, shareholders or other backers or interested parties. It is for the plaintiff to satisfy the court that it would be prevented by an order for security from continuing the litigation."

7. Although the likelihood of the plaintiff succeeding in his claim is relevant it is also clear that the court should not go into a detailed examination of the merits of the case too readily. In Porzelack KG v Porzelack (UK) Ltd [1987] 1 WLR 420 at page 423C to F,

"The matters urged before me have spread over a fairly wide field. First there have been attempts to go into the likelihood of the plaintiff winning the case or the defendant winning the case, presumably following the note in The Supreme Court Practice 1985 para 23/1 - 3/2, which says: '...A major matter for consideration is the likelihood of the plaintiff succeeding...' This is the second occasion recently on which I have had a major hearing on security for costs and in which the parties have sought to investigate in considerable detail the likelihood or otherwise of success in the action. I do not think that is a right course to adopt on an application for security for costs. The decision is necessarily made at an interlocutory stage on inadequate material and without any hearing of the evidence. A detailed examination of the possibilities of success or failure merely blows the case up into a large interlocutory hearing involving great expenditure of both money and time.

Undoubtedly, if it can clearly be demonstrated that the plaintiff is likely to succeed, in the sense that there is a very high probability of success, then that is a matter that can properly be weighed in the balance. Similarly, if it can be shown that there is a very high probability that the defendant will succeed, that is a matter that can be weighed. But for myself I deplore the attempt to go into the merits of the case unless it can be clearly demonstrated one way or another that there is a high degree of probability of success or failure."

Hence detailed investigation of the merits is only justified when the plaintiff can clearly demonstrate a high degree of probability of success. (see also Leslie Fay Co. v Cheerior Ltd [1990] 1 HKC 463).

Probability of Success

8. Mr Lin submitted that the present case was indeed one in which the Plaintiff could demonstrate a high degree of probability of success. He relied strongly on the recent Court of Final Appeal decision in Kensland Realty v Whale View Investment Ltd [2002] 1 HKLRD 87. He submitted that by reason of the principle that a man shall not be allowed to take advantage of a condition which he himself brought about, it did not lie in the Defendant's mouth to say that the tender by the Plaintiff of the purchase price by way of cheques in accordance with the wrong split cheques instructions were ineffective as payment pursuant to the agreement. He further submitted that the Defendant could not force a late completion on the Plaintiff. On these points, he referred me to paragraphs 29 and 30 of the judgment of Bokhary PJ in Kensland Realty at pages 98-99. In my judgment, there are material differences between the situation dealt with by the Court of Final Appeal in that case and the present case. In Kensalnd Realty, the solicitors for the vendor did not give directions as to split cheques until just more than one hour before the deadline for completion. The cashier orders were delivered to the solicitors for the vendor 6 minutes after the deadline. The vendor refused to accept and purported to rescind the agreement on the basis of the purchaser's failure to complete in time. The Court of Final Appeal held that a vendor giving a split cheque direction must make reasonable allowance for the purchaser's solicitors to perform their duties in relation to completion. Reasonable allowance should be made for the time needed for delivery of the payment instruments and accompanied documents by hand to the agreed venue for completion. On the facts of the case, the Court of Final Appeal held that the tender by the purchaser at 6 minutes after the time stipulated for completion was within a reasonable time after the split cheques directions were given by the solicitors for the vendor. Hence, the vendor was not entitled to treat the failure to meet the original deadline as repudiatory. The vendor's refusal to accept the tender was itself held to be a repudiatory breach of the contract.

9. In the present case, the crucial issue is not the time when the split cheques directions were given. In my judgment, the crucial issue is, on the assumption that the Defendant was able to establish at the trial that the Plaintiff and its solicitors were at all material times well aware of the incorrect spelling as to the name of the payee in the original split cheques directions, whether they were entitled to do nothing in the meantime until a very late stage and proceeded to tender a cheque which they knew to be unable to be encashed by the Defendant as payment. Further, it has to be remembered that in the present case it was the Plaintiff purchaser who purported to rescind the agreement in the next morning. Mr Lin submitted that the Plaintiff was entitled to do so and what the Defendant should have done was to complete the transaction on 15 December 1997 even though the wrong cheque was tendered to them and then tried to sort out the question of replacing the cheque later on. In the absence of any promise on the part of the purchases or its solicitors to replace the cheque, it is not apparent to me how the vendor could demand a replacement. If the tender by the wrong cheque was accepted as sufficient payment under the Sale Purchase Agreement, the purchaser had fully performed his obligations thereunder. Bearing in mind that in each conveyancing transaction, payment by the purchaser and performance by the vendor of its obligation are concurrent conditions, it is arguable that given the Plaintiff's knowledge as to the ineffectiveness of the cheque as payment, it was not entitled to force the vendor to complete upon the tendering of such a cheque, at least without any promise by the purchaser's solicitors to replace the cheque within a reasonable time. Since this is only an interlocutory application, the less I say regarding the merits of the case the better. Yet, for the reasons given, I am of the view that this is not a case which falls within the category where the Plaintiff can clearly demonstrate that it has such a high degree of probability of success at the trial that no security for costs should be given.

Delay

10. I turn to the question of delay. Mr Lin submitted that the Defendant was aware of the lack of means of the Plaintiff at a very early stage and yet chose to wait for more than 3 years before making the application for security for costs. The first request for security for costs was made in a letter dated 22 March 2001. By that time, pleadings had been closed and discovery completed. According to a letter dated 27 March 2001, the plaintiff was in the process of finalizing the witness statements. Mr Lin submitted that the Plaintiff therefore had already incurred substantial costs in terms of preparation for this action and hence suffered prejudice if security for costs is ordered against it at this late stage. He made reference to a number of cases to support his contention that in these circumstances, the Defendant should be regarded as having waived its right to security for costs.

11. However, as I have pointed out, the summons for security for costs was taken out by the Defendant before the case was set down for trial. Leave to set down was only granted by Master Lung on 26 September 2001. Witness statements were exchanged on 13 August 2001, about 2 months after the summons for security for costs was issued. Although the application could have made earlier, I do not agree that it was made so late or so closed to the trial that it should not be entertained by the court without any reasonable explanation for the delay. Mr Lin submitted that lateness should be determined by reference to the time when the Defendant acquired information about the Plaintiff's financial position and he cited the case of BBNB Finance v China Underwriters Life and General Insurance Company [1991] 1 HKLR 617 as authority for that proposition. Whilst it is correct that the Court of Appeal in that case did accept the submission that for the purpose of determining the question of delay in the context of an application for security for costs, the proper timing to be considered was the time when the defendant acquired information about the plaintiff's financial position, I do not think it is correct to suggest that such time lapse was the only factor to be taken into account on the question of delay. The Court of Appeal did refer to the prejudice caused to the plaintiff as a result of such delay and the Court of Appeal characterized the conduct of the defendant in making such a late application so close to the trial as oppressive. In that case the application was made by the defendant some 7 months after the action had been set down for trial and only about 8 weeks before a 10-week trial was due to begin (see page 627H). Further, at page 627I, Court of Appeal also emphasized that the plaintiff in that case, being a company in liquidation, was subject to further prejudice in that the liquidator had made interim distribution without knowledge of the defendant applying to add 3rd parties to the action with the consequence that the costs would be enormously increased and in respect of such costs, the defendant sought security at a late stage.

12. The other local case cited by Mr Lin was the case of Haller v Haller International Ltd [1999] 36 HKCU 1. In my judgment, that case does not take Mr Lin's point very far. The test applied by Sakhrani J in that case was the same one as applied in BBNB Finance, namely whether the application was made too late or too close to the trial without reasonable explanation for the delay. Again the facts of that case were substantially different from the present case. The application was in fact made by the defendant in the middle of a trial. The trial lasted for 3 days from 16 November to 18 November 1998 and became part-heard. There would be another 5 days' hearing in June 1999. On 30 November 1998, the defendant took out the application for security for costs. Hence by that stage, substantial costs were incurred by the plaintiff in terms of the costs of the trial.

13. In my judgment, the case cited by Mr Sakhrani, counsel for the Defendant on this point, is more pertinent. In Croft Leisure v Gravestock & Owen [1993] BCLC 1273, Staughton LJ said at page 1279,

"As Hirst LJ pointed out, it is often a difficult decision when to make a substantive application [for security for costs] before trial. If one makes it too early one is reproached because one cannot forecast accurately how long the trial will take and how much it will cost. If one makes it too late, one is said to have led the plaintiff up the garden path. October 1992 was perhaps rather late in this case; may be the application should have been made 2 or 3 months earlier, but there was little, if any prejudice here to the plaintiffs through that".

14. In a way, before the exchange of witness statements, one may not be able to give an accurate or fair estimate as to the length of the trial. Bearing in mind the costs incurred by the Plaintiff in terms of pleadings, discovery and preparation of witness statements in the present case by reference to the material before me, I do not think the Plaintiff has suffered any prejudice by reason of the facts that the request for security for costs was only made in March 2001, at least not prejudiced to the extent that the Defendant's conduct should be characterized as oppressive. Nor do I think the application was made too late or too close to the trial. Although Mr Lin also cited a number of overseas authorities to me, I do not think they take his case further. Each case must depend on its own facts. On the facts of the present case, I do not regard the factor of delay as significant.

Stifling of claim

15. Turning now to the question whether an order for security for costs against the plaintiff would stifle the claim, the principle is well established. Bingham LJ said in the case of Thune v London Properties Ltd [1990] 1 WLR 562 at page 573,

"if the plaintiff is impecunious and an order for security for costs may stifle his claim, that may very well be a powerful reason for not ordering security."

Similarly in the case of Porzelack KG v Porzelack (UK) Limited [1987] 1 WLR 420 at page 426F, Browne-Wilkinson VC said,

"It is always a matter to be taken into account that any plaintiff should not be driven from the judgment seat unless the justice of the case makes it imperative. I am always reluctant to allow application for security for costs to be used as a measure to stifle proceedings."

16. However, one must bear in mind that in all applications under section 357 of the Companies Ordinance, before the court could exercise any discretion to order security for costs, it must be satisfied by credible testimony that there is reason to believe that the company will be unable to pay the costs of the defendant if successful in his defence. Hence, when the defendant evokes this provision to ask for security for costs, it must establish by credible testimony that the plaintiff is impecunious. It follows that the court should not infer too readily from the impecuniosity of the plaintiff that proceedings will be stifled. Otherwise, the whole section would be self-defeating. This was the interpretation put on the section by the Court of Appeal in the case of Wing Hing Provision, Wine & Spirits Trading Ltd v Hanjin Shipping Co. Ltd [1998] 4 HKC 461 at page 465E-H. To the same effect is the decision of Kaplan J in the case of Dragages Et Travaux Public v Hong Kong Chinese Insurance Co. Ltd [1993] 1 HKC 617 at pages 621C-622C where reference was made to the judgment of Saville J in Flender Werft AG v Aegean Marintime Ltd [1990] 2 Lloyds Report 27 at pages 29 and 30. I only need to refer to a passage in the judgment of Saville J at page 29,

"To my mine, particularly where commercial entities are involved, any argument that an order for security will stifle a claim is likely to fail in limine, unless the court is persuaded that in truth it is at least more likely than not that funds are not available from any source to provide or support security. Unless the court can be so persuaded, the suggestion of potential in-justice will not, ex-hypothesi, be demonstrated."

17. Mr Lin however urged me to adopt a different approach. He submitted that it is now common ground that the Plaintiff is impecunious. I should perhaps mentioned that this was slightly different from the stance taken by the Plaintiff at the hearing before the Master. At that stage, the Plaintiff put the Defendant to proof that the Plaintiff would be unable to pay the costs of the Defendant if successful in its defence. Be that as it may, this being a rehearing, I do not attach any significance to the change of stance on the part of the Plaintiff. Mr Lin submitted that where it is shown that the Plaintiff is impecunious as in the present case, it does not have the additional onus of showing that his friends, relatives and neighbours will not dig into their pockets to support him. He relied on the judgment of Litton JA (as he then was) in the case of the Silver Dawn, Civil Appeal No. 171 of 1992, 23 February 1994. Mr Lin submitted that different approaches were adopted by Litton JA and Godfrey JA in that appeal. Since Power V-P concurred with Litton JA, Mr Lin submitted that the view of Godfrey JA was only a minority view.

18. I do not think the approach of Litton JA in the Silver Dawn was inconsistent with the approach I have set out in the paragraphs above. The submission of the counsel for the defendant in that case was that it was not sufficient for the plaintiff to show that he did not personally have assets within his own control; he had to show that he was unable to raise the amount of his security elsewhere and it was submitted that the plaintiff had failed to show this. If one reads the judgment of Litton JA carefully at page 6 of the unreported judgment, Litton JA did accept that the plaintiff also had to show that he was unable to raise the amount of the security elsewhere. Hence, his Lordship said at page 6,

"On an application under O. 23 rule 1 where it is shown that the plaintiff is impecunious, and from the circumstances is unlikely to have the ability to raise large sums, he does not have the additional onus of showing that his friends, relatives and neighbours will not dig into their pockets to support him. The matter cannot be generalized; it must depend upon the circumstances of each case." (my emphasis)

What Litton JA disagreed with counsel for the defendant was that on the facts and circumstances of that particular case the plaintiff had failed to meet these requirements. The conclusion of Litton JA was that the case was a far cry from a plaintiff having access to substantial resources elsewhere. In fact his Lordship did ask himself the question whether it was reasonable to infer from the evidence that the village brigade would support the plaintiff with hard cash or assets in the event that the court ordered that security for costs be provided.

19. Looking the judgment of Litton JA in that light, I do not think that his approach was significantly different from that of Godfrey JA. At page 8 of the unreported judgment, the test put forward by Godfrey JA was,

"Whether on the totality of the evidence it ought to be inferred that it would really be impossible for the plaintiff to provide or procure the provision of the sum in which security would otherwise be ordered."

20. As Litton JA emphasized in the Silver Dawn, one should not generalized and each case must depend on its own circumstances. One must bear in mind therefore that in the Silver Dawn, the plaintiff was a fisherman in a small village in Guang Zhou. The case concerned with a collision between the plaintiff's fishing vessel and another vessel called the Silver Dawn. The application was made under O. 23 r. 1 instead of section 357 of the Companies Ordinance. There were evidence before the court in that case about how the litigation could be kept on foot despite the financial predicament of the plaintiff.

21. By way of contrast, in the present case, the Plaintiff was acquired by its parent company shortly prior to the signing of the sale and purchase agreement. The Plaintiff admitted that it had not commenced any business and did not have any asset. Hence, the deposit under the sale and purchase agreement must have been paid by its financial backers. Likewise, the costs incurred by the Plaintiff in the present action must have been paid by such persons as well. The Plaintiff said in the second affirmation of Ho Fung Him that all along the Plaintiff was financially dependent upon its parent company Zhongda Hong Kong International Trading Co. Ltd. It was said that the business of Zhongda was trading in garments and its business since 1998 dwindled. Financial statements for Zhongda for 1999 and 2000 were produced. Whilst it is correct that in these 2 years, Zhongda appears to have no business turnover, the latest balance sheet of Zhongda produced by the Plaintiff shows that Zhongda had substantial assets in the form of investments in subsidiaries company. Mr Lin told me that the current financial position of Zhongda is not materially different that as shown in these financial statements. From the accounts, it appears that apart from the Plaintiff, another subsidiary of Zhongda was Sino Aim Industrial Limited. That was said to be a company involved in property investment. The value of investments by Zhongda in its subsidiaries were said to be in the sum of HK$17,892,626 as at 31 December 2000. Although no updated figures have been provided to me by the Plaintiff, the Plaintiff did not suggest that these investments in subsidiaries have been diminished. In the balance sheet, these assets were said to be balanced against a substantial liabilities in the form of amount due to a related company. The liabilities were said to be in the sum of HK$17,156,571 as at 31 December 2000. The name of that related company was not disclosed to me. According to the notes to the financial statements (see page 213 of the bundle) "related parties" are defined as follows: two parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decision. The parties are also considered to be related if they are subject to common control or common significant influence. Further, Zhongda was itself held by an ultimate holding company called Zhejiang Zhongda Group Co. Ltd. The accounts of this ultimate holding company have not been disclosed to me.

22. In my judgment, the ultimate question is whether I am satisfied on all the evidence and relevant circumstances before me that if the Plaintiff is ordered to pay security for costs the claim would be stifled. This is a claim arising from a very substantial conveyancing transaction. A large sum of money was paid by way of deposit. The Plaintiff is now seeking by this action to recover the same and according to its counsel, the Plaintiff believed that it has a very good prospect of success. Although the Plaintiff itself is a shelf company and has no asset, in the light of the information disclosed in the financial statements, I am not satisfied that those ultimate in control could not provide the necessary fund to meet any order for security for costs. Given their view as to the prospect of success and the amount at stake, I see no reason why those persons would forego their claim just because an order for security for costs was made against the Plaintiff. In other words, I am not satisfied that from all the circumstances the Plaintiff is unlikely to have the ability to raise sufficient fund to meet any order for security for costs. As I have said, it would appear that its financial backer has no difficulty in financing the Plaintiff's own cost incurred so far in the action.

23. Before I leave this point I should mention that in Wing Hing Provision, Wine and Spirits Trading Co. Ltd v Hanjin Shipping [1998] 4 HKC 461 the Court of Appeal held that there was just enough material to justify an inference that an order for security for costs would stifle the claim even though there was no direct evidence. However one must bear in mind that on the facts of that case there was evidence showing that the plaintiff was in arrears in terms of the payment of its own cost to its own solicitors and that the plaintiff had to act by its directors in the application for security for costs. On the other hand, in the present case the Plaintiff appeared by counsel both at the hearing before me and at the hearing before the Master. Hence, that was also a very different case from ours.

Conclusion

24. Having dealt with the 3 points relied upon by Mr Lin to resist the application, I have to exercise my discretion by reference to the principles which I have set out at the beginning of this judgment. This is a balancing exercise. Having taken into account of all the relevant factors, including the 3 objections raised by Mr Lin, I am of the view that on balance I should grant security for costs in the present case. Given the obvious risk that the Defendant could not recover any cost against the Plaintiff in the event that it is successful in his defence, I do not think the counterveiling factors referred to by Mr Lin on behalf of the Plaintiff, whether taken individually or together, are of sufficient weight to offset the injustice to the Defendant if no security for costs is granted. In my judgment, the present case is similar to the situation before the Court of Appeal in the case of Tufnell Investment Ltd v Thosowin Properties [1995] 2 HKC 14. Of course, I have come to my conclusion by considering all relevant factors in the circumstances of the present case instead of just following the decision of the Court of Appeal in that case.

Quantum

25. As to quantum, the Defendant asked for the sum of HK$1,179,200. The sum ordered by the Master was HK$660,000. Mr Lin submitted that the latter figure is still too high because out of the 6 days trial, only 2-3 days would be necessary for the main trial, whereas the other time would be engaged for the purpose of the Third Party proceedings for which security for costs should not be granted. Further, he submitted that there was no need for the Defendant to engage leading counsel for the trial as between the Plaintiff and the Defendant. Mr Lin also submitted that there should be discount on the figures provided by the Defendant by reason of the fact that security for costs should be calculated by reference to party and party taxation.

26. In my judgment, the issues between the Plaintiff and the Defendant are more complicated than the issues between the Defendant and the Third Party. It is likely that more time would be spent at the trial on questions between the Plaintiff and the Defendant than question between the Defendant and the Third Party. In fact, if the Defendant is not successful in its defence, the issue as to liability of the Third Party appears to be relatively straightforward on the material before me. I do not agree that the Defendant is not justified to engage leading counsel for the trial as between the Plaintiff and the Defendant. As I have said, the question as between the Plaintiff and the Defendant is not as straightforward as Mr Lin submitted.

27. Although this is a rehearing, I am entitled to have regard to the Master's decision. Even without the Third Party proceedings, my rough estimate is that the trial between the Plaintiff and the Defendant would last 4 days. Looking the matter in the round, a sum of $660,000 as cost for the whole action in respect of a 4-day trial involving leading counsel on the facts of the present action seems to me to be an appropriate figure.

28. For these reasons, I dismiss the appeal with costs.