EIRON EISENERZ UND ROHSTOFF GMBH & CO., Kg v. MINMAX RESOURCES HOLDING CO., LTD

HCCL 9/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL ACTION NO. 9 OF 2011

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BETWEEN

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D E C I S I O N

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1.  This is an application for security to cover the defendant’s costs of the action from the PTR up to the date of the trial. The trial date was fixed on 31 January 2013 with 4 days reserved.

2.  Under the consent order of Reyes J dated 21 November 2011, the plaintiff had previously provided security in the sum of $400,000 to cover the defendant’s costs in the early stage of the proceedings up to the PTR.

3.  Liability to pay further security for the defendant’s costs is not disputed, and the parties only disagree as to the quantum of the security.

4.  Both parties agree with the following principles relating to the assessment of quantum of security for costs.  Firstly, the amount of security awarded is in discretion of court, which shall fix such sum as it thinks just having regard to all the circumstances of the case. Secondly, in assessing the quantum of the security, the court should not evaluate the skeleton bill of costs line by line, if there is one provided, but rather adopting a “broad brush” approach.  Thirdly, the court would usually give a discount on the amount of security for costs to be ordered, though there is no strict rule or a specific range of percentage of discount to be given on the amount of the security for costs to be ordered.

5.  After pursuing the defendant’s skeleton bill of costs, I am of the view that the amount of estimated costs and disbursement in the sum of $1,290,400 is excessive.  In particular, counsel fee and time spent by the solicitors in the preparation of the case are excessive.  As the issues involved in this case are not particularly difficult and the time estimate of the trial is only 4 days, I am of view that $1,000,000 is a more realistic estimate.

6.  This case has gone through mediation but was not successful.  Despite that, I am of the view that the court should give a discount to the security to take into account the uncertainty in the development of the case.  In such case, I give a discount of 20%.  I therefore order the plaintiff to pay security of costs in the amount of $800,000.