XCHRX GREEN PARK PROPERTIES LTD. v. DORKU LTD.

CACV205/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 205 OF 2000

(ON APPEAL FROM HCA 8564 OF 1998)

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D E C I S I O N

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1. This is an application for security for costs of an appeal from a judgment of Cheung J, the judgment was given on 13 June 2000.

2. In effect, the Judge ordered the return of a deposit which the plaintiff had paid for the costs of the purchase of a property and he also awarded damages which are of a comparatively minor amount.

3. The basis of the application is that the defendant, who is the appellant, is impecunious. The defendant is a company. We have not seen the audited accounts but it is quite clear that the defendant does not have sufficient funds to finance the appeal. Whether or not those behind the defendant have sufficient funds is not altogether clear, as Mr Chan SC pointed out, in the past there were clearly large profits which had been made by the defendant.

4. Mr Mok on behalf of the defendant however says that that money has now disappeared in further investments which have not been so successful and, indeed, those responsible for running the defendant have had to move out of their own premises. Mr Mok on behalf of the defendant also sought to argue that the defendant has good grounds on the appeal for being successful.

5. I intend to say very little about the merits because the less I say at the moment the better, if this appeal is to proceed. I am of the view that given the nature of this case and the issues involved and the fact that it is a large conveyancing case involving commercial entities, this is an appropriate case for security for costs on the appeal. I am not satisfied that the strength of the appellant's case is sufficient to merit that there being no security for costs. In that case, I would have proposed to make an order that the defendant should provide $800,000 as security for costs on the appeal. This is a high amount, however, having listened to counsel, I concede that substantial sums will be involved in this appeal and although criticism was made as to some of the costs, they were comparatively minor criticisms and I consider that the figure which I would have come to is probably reasonable in the circumstances. However, in view of the fact that the appeal has been listed to be heard comparatively quickly it is necessary that any security is given within the next 3 weeks. I will therefore reduce the amount of security to $500,000 which I consider reasonable in view of the short time necessary to raise the security.

6. The order that I propose to make is :

1. the defendant do on or before 17 October 2000 give security to answer costs in case any shall be awarded to be paid by the defendant to the plaintiff by making lodgment in Court of the sum of $500,000 by cash or bankers draft or by the provision of a bank guarantee of the like amount which guarantee shall have been approved by the Registrar; and until such lodgment be made and notice thereof given to the Registrar and to the solicitors for the plaintiff (such notice to be given on the same day as the lodgment is made) all proceedings in the said appeal are to be stayed;

2. in default of the defendant making such lodgment as aforesaid within the time specified above or within such further time as the Court may for special reasons allow, the said appeal do (upon the solicitors for the plaintiff certifying such default to the Registrar) stand dismissed out of this Court without further order;

3. in the event that the appeal is dismissed in the circumstances provided for above the defendant do pay to the plaintiff their costs occasioned by the said appeal such costs to be taxed; and

4. the costs of this application be the plaintiff's costs in the appeal.