CHEKIANG FIRST BANK LTD v. HENG HING ENTERPRISES (HK) LTD AND ANOTHER

CACV 138/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 138 OF 2000

(ON APPEAL FROM HCA NOS. 19725, 21101 & 21102 OF 1998)

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J U D G M E N T

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1. On 16 March 2000 Waung J dismissed the appeal of the 1st and 4th Defendants ("the Defendants") from the order of Master Lung giving the Plaintiff summary judgment against them in the sum of $4.7m. odd together with interest. The Defendants are appealing to the Court of Appeal. The Plaintiff now applies for security for its costs of the appeal. By its summons, it seeks security in the sum of $310,000.00. It does so on the ground that the Defendants are impecunious. If the appeal fails, and if the Defendants are ordered to pay to the Plaintiff the Plaintiff's costs of the appeal, they will, so it is said, be unable to do so.

2. The 1st Defendant's debt to the Plaintiff is to some extent secured by a large sum deposited by the 4th Defendant with the Plaintiff and by a flat which was mortgaged to the Plaintiff. The Plaintiff proposes to enforce its judgment by realising that security. The sum which that security represents is said to be less than the judgment debt plus interest and will therefore not be available to secure the Plaintiff's costs of the appeal. I am satisfied about that and that the evidence relied upon by the Plaintiff is sufficient to raise an inference of impecuniosity on the part of the Defendants such as to call for a response from them. No evidence has been filed by the Defendants in response, and in any event the 4th Defendant (who represents the 1st Defendant as well) has told me that they would have difficulty in raising even $100,000.00. Accordingly, this is, in my opinion, an appropriate case for an order for security for costs.

3. However, the estimated bill of costs which has been exhibited does not take into account the incidence of taxation, despite the statement in Hong Kong Civil Procedure, 2001, para. 59/10/37, that the estimated bill of costs "should not show solicitor and own client costs, but should set out the costs which could reasonably be expected to be allowed on a taxation on the standard basis". In my opinion, a more realistic figure for the Plaintiff's costs, taking into account the time which the Plaintiff's solicitors are really likely to spend on the preparation of the appeal, a more accurate estimate of the disbursements to counsel, and therefore what the Plaintiff is indeed likely to recover on taxation, is the sum of $90,000.00. I therefore direct that all proceedings in the appeal be stayed until the Defendants pay the sum of $90,000.00 into court as security for the Plaintiff's costs of the appeal. I further direct that if the Defendants fail to pay that sum into court by 4.00 p.m. on 27 March, their appeal be dismissed, and that the Defendants be ordered to pay the Plaintiff's costs of the appeal to be taxed if not agreed. However, I give the Defendants liberty to apply for an extension of time to provide the security if they find themselves in genuine difficulty in raising the $90,000.00 by 27 March.