HUI (ANNIE) GUO v. YUEDONG XU AND OTHERS

HCCL 3/2019

[2020] HKCFI 425

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL ACTION NO 3 OF 2019

(TRANSFERRED FROM HIGH COURT ACTION NO. 2404 OF 2018)

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D E C I S I O N

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1.  This is the application of the 4^th and 5^th Defendants (“Defendants”) for security for costs against the Plaintiff in the sum of HK$2,937,717.50 for costs up to and including discovery in this action.

2.  Upon the invitation of the court, the parties had agreed that this application be dealt with on paper.  The issue is confined to the quantum of the security to be provided.

3.  It is relevant to bear in mind that the Plaintiff had already provided security for the Defendants’ costs from commencement of these proceedings up to and including the hearing of their application to strike out the Statement of Claim[1] in the sum of HK$600,000[2]. 

4.  The applicable legal principles, helpfully set out in the Plaintiff’s skeleton arguments, are not in dispute.  In particular, it is common ground that the court takes a broad-brush approach in the assessment of the quantum of security.

5.  I have to say that, whilst this case may involve a significant amount of documents, it appears from the Defence of the Defendants that the issues they take with the Plaintiff’s case are not unduly complex.  Therefore, the quantum claimed by the Defendants is surprisingly high.  For instance, counsel fees (senior and junior) in the total sum of HK$382,500 are sought for the production of the 12-page Defence. 

6.  There are merits in much of the submissions advanced by the Plaintiff in opposition to the application.  In particular, I see no reason to revisit the quantum of the security provided for the strike out application.  It is trite that a defendant is entitled to sufficient security but not complete security for his costs. 

7.  Further, it is accepted by the Defendants that the hourly rates used in their draft Skeleton Bill of Costs exceeded the rates applied on party and party taxation.

8.  Furthermore, the number of hours provided for the works of the solicitors should be adjusted downwards given their familiarity with the case after having conducted the strike out application and the involvement of 2 counsel.  It is worth mentioning that: (a) the legal research by the solicitors would, at least to some extent, duplicate with the work of counsel; and (b) the costs for this application must be considerably reduced by the paper disposal.

9.  Finally, I am not inclined to allow a sum for the Request for Further and Better Particulars of the Amended Statement of Claim when no such Request has been made to date, 9 months after the Defendants had received a copy of that document.

10.  In the premises, I hold that the appropriate security should be in the sum of HK$1,000,000 (in addition to the HK$600,000 already paid into court by the Plaintiff).  I make an order in terms of paras 1 and 2 of the Summons filed on 23 December 2019 with the adjusted quantum. Although the sum ordered exceeds that which was offered by the Plaintiff (HK$802,400 (in addition to the HK$600,000)), the quantum claimed by the Defendants has been considerably reduced.  On balance, I believe that the fair costs order for this application should be in the cause, and I make an order nisi accordingly. 

[1]  That application had been dealt with.

[2] The Defendants propose to give credit for this sum against the security to be provided under this application.