WORLD FUEL SERVICES (SINGAPORE) PTE LTD v. FLORENS CONTAINER INC.

FACV No. 22 of 2006

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

 FINAL APPEAL NO. 22 OF 2006 (CIVIL)

(ON APPEAL FROM CACV NO. 327 OF 2005)

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D E C I S I O N

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Mr Justice Bokhary PJ:

1.  Whenever the Appeal Committee grants leave to appeal to the Court of Final Appeal, it does so on the understanding that the respondent is at liberty to go to the Registrar for the imposition of conditions under s.25 of the Hong Kong Court of Final Appeal Ordinance, Cap.484.  These include a condition under subsection (2)(a) that the appellant “enter into good and sufficient security, for the due prosecution of the appeal, and the payment of all such costs as may become payable to the respondent in the event of the appeal being dismissed for non-prosecution, or of the Court ordering the appellant to pay the respondent’s costs of the appeal”.  Subsection (3)(b) provides that the security required under subsection (2)(a) “shall … be in a sum not exceeding $400,000 in respect of each respondent.”

2.  In the present case, the appellant World Fuel has offered the respondent Florens security for costs in the sum of $400,000.  Florens has rejected World Fuel’s offer, and has taken out this summons, before me as a single Permanent Judge, seeking security for costs exceeding $400,000. 

3.  Before turning to Florens’ argument on this summons, it is necessary albeit laborious to recite s.25 in full.  It reads :

“	(1)	Where the Court of Appeal or the Court decides or is required to grant leave to appeal pursuant to an application made under section 24 it may grant leave subject to such conditions as it considers necessary.
	(2)	Without restricting the generality of subsection (1) leave granted under subsection (1) may be granted –
		(a)	upon a condition that the appellant shall enter into good and sufficient security, for the due prosecution of the appeal, and the payment of all such costs as may become payable to the respondent in the event of the appeal being dismissed for non–prosecution, or of the Court ordering the appellant to pay the respondent's costs of the appeal; and
		(b)	upon such other conditions (if any) as to the time or times within which the appellant shall procure the preparation of the record as the Court of Appeal or the Court considers appropriate.
	(3)	The security required under subsection (2)(a) shall –
		(a)	be entered into within a period to be fixed by the Court of Appeal or the Court, but not exceeding 3months from the date on which the application for leave to appeal is granted; and
		(b)	be to the satisfaction of the Court of Appeal or the Court in a sum not exceeding $400,000 in respect of each respondent.
	(4)	The Court of Appeal or the Court, as the case may be, may vary any conditions it has imposed under this section in such manner as it considers fit.
	(5)	The Chief Executive in Council may by order published in the Gazette amend subsection (3)(b) to vary the amount specified.
	(6)	Without prejudice to subsection (2) the Court of Appeal or the Court, as the case may be, may when granting leave under subsection (1) impose a timetable on any party for the prosecution of the appeal and may either on the application of a party or of its own motion vary that timetable.”

4.  Florens asks me to order security for costs in the sum of $600,000 or such other sum in excess of $400,000 as I deem fit.  It is argued on Florens’ behalf that the power to order conditions is limitless and that subsection (3) merely sets out the practice to be adopted subject any variation ordered under subsection (4) which, as we have seen, empowers the Court to “vary any conditions it has imposed under this section in such manner as it considers fit”.

5.  I reject that argument.  Subsection (4) is concerned with varying conditions that have been imposed.  No such variation can operate to bring about a condition that there was no jurisdiction to impose in the first place.  Subsection (3)(b) caps the amount that can be ordered by way of security for costs at $400,000 per respondent.  That cap can be amended.  As we have seen, subsection (5) provides that “[t]he Chief Executive in Council may by order published in the Gazette amend subsection (3)(b) to vary the amount specified”.  No such amendment to the amount specified has been made, and $400,000 therefore remains the cap.  The formula in subsection (2) “Without restricting the generality of subsection (1)” leaves room for what the Appeal Committee described in Cathay Pacific Airways v. Wong Sau Lai (2006) 9 HKCFAR 45 as “additional conditions” i.e. conditions other than those of the type specifically provided for in subsection (2)(a) and (b).  But the formula cannot override the $400,000 cap.  There is no jurisdiction to order security for costs in excess of $400,000 per respondent.

6.  Having so held on the plain wording of s.25, I should mention that the reading I give the section is the reading it received from the Court of Appeal in Li Tat Kong v. Official Receiver CACV No.220 of 2000, 23 November 2001.  Giving the judgment of the Court of Appeal in that case, Mr Justice Rogers VP said (in paras 14 and 15) that the $400,000 specified in subsection 3(b) is a “limit of jurisdiction” and that the power under subsection (4) to vary conditions “cannot be a power to vary them beyond the jurisdiction of the court”.

7.  In the result, Florens’ application for security for costs in excess of $400,000 is dismissed.  World Fuel continues to offer to enter into security for costs in the sum of $400,000, offering to do so within 14 days of today.  On the basis of this offer, I order security for costs in the sum of $400,000 to be entered into by World Fuel within 14 days of today.  Apart from thanking the advocates, it remains only to hear them on the costs of and occasioned by this summons.

[World Fuel asked for the costs of and occasioned by this summons to be taxed (if not agreed).  Florens asked that such costs be in the appeal.]

8.  All things considered, I award to World Fuel against Florens the costs of and occasioned by this summons to be taxed (if not agreed).