PARK AVENUE TOYS LTD v. CANDY NOVELTY WORKS LTD

cacv 158/2005

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 158 of 2005

(on appeal from HCA NO. 11135 of 1997)

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J U D G M E N T

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Hon Rogers VP:

1.  In this case, both parties seem to have been at fault.  This is an application for security for costs in the sum of $325,000.  What had happened in the court below is that security was given by way of a bank guarantee for the costs.  At the conclusion of the trial, the judge dismissed the Plaintiff’s claim but he ordered that each party should bear its own costs.  He did so because the Defendant was also at fault.  Whether that judgment survives or not, I do not know.  There is a specific appeal by the Defendant in that respect as well as an appeal by the Plaintiff against the finding that it did not succeed in the action. 

2.  However, the bank guarantee remained in force until 13 October 2005 which is two months ago, some year and three months after the date when the original judgment was given.  The Plaintiff’s solicitors wrote to the Defendant’s solicitors saying that they were prepared to pay $600,000 as security for costs into court because the bank guarantee would no longer be in force because the underlying property on which the bank had secured that amount had been sold, or was about to be sold.

3.  That has been agreed and an order has been made.  In fact, what should have happened is the guarantee should have lapsed because of the judge’s order that there be no order as to costs between the parties, so the Defendant was not entitled to any costs; the bank guarantee would therefore go; there was no stay of the security-for-costs provision pending any appeal [it would seem that no such stay could be granted: see Shanghai Tongji Science & Technology Industrial Co. Ltd v Casil Clearing Ltd (11/08/2003, FAMP2/2003)], and there the matter remains. 

4.  However, since now the Plaintiff has agreed to have $600,000 in court, I see no reason why any further security should be given on this appeal and the amount will stay at $600,000 in court.  There has been a consent order that that should remain and, in my view, the Defendant is not entitled to any further security.  It has already got too much, but there it is.