XCHRX SOLAR EXPORTS LTD. v. MOHAN DOULATRAM SAJNANI t/a EVERGREEN INTERNATIONAL

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

1998, No. 275
(Civil)

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J U D G M E N T

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Mortimer, V.-P.:

This is an application by the plaintiff in these proceedings for security for costs in relation to the appeal.

2. Mr Sajnani who trades as Evergreen International is the defendant. The claim is simply one for money which the defendant has received on the plaintiff's behalf. The plaintiff is an exporter and at the relevant time the defendant was its agent. Goods were sold through the agent to Spain at a price of US$47,600 payable by an irrevocable letter of credit. The goods were supplied to the defendant for export. In April 1997 they were forwarded to the buyer. The plaintiff asked the defendant to negotiate payment and so the defendant presented the bill of lading and other necessary documents to the bank and received payment, but he has since failed to remit that money to the plaintiff.

3. He says that there is some kind of setoff. He has already taken proceedings before the Labour Tribunal. The notes of proceedings are not in front of me but apparently were in front of Cheung J when the matter came before him.

4. Before going further, it is necessary to explain what, I believe, has happened. In these proceedings, the plaintiff applied for a summary judgment under O14. After some delay caused by the defendant's application for legal aid and the resultant stay, on 12 October 1998, Mr Registrar Betts heard the application and gave judgment for the sum claimed together with interest and costs to be taxed. The defendant applied to Mr Registrar Betts for a stay so that he could make another application for legal aid and, indeed, he did.

5. He appealed against the refusal of a stay to Cheung J who similarly refused him a stay. Now it appears that he seeks to apply to the Court of Appeal to appeal against the refusal of the stay. As far as I can see, Cheung J did not have in front of him any appeal against the order for summary judgment, so that issue has never been resolved.

6. The application now is for the plaintiff to have security for the costs of this appeal, in proceedings which appear to me to have gone completely off the rails. The first ground is that Mr Sajnani is impecunious. That seems to be conceded because he has put a statement in front of me which says that he has no means to pay security for costs and that he simply cannot pay them. The matter does not end there because there is a second ground. It is that if it becomes necessary after the appeal for the plaintiff to seek its costs out of the defendant, there may be undue delay and expense in obtaining that costs order because Mr Sajnani is not permanently resident in Hong Kong. He has a home in Bombay as well.

7. In those circumstances I am satisfied, and I do have power to order security for costs of the appeal. The only question is whether I ought to exercise my residual discretion not to make such an order as contrary to the interest of justice. But having considered the merits here, I am quite satisfied that there is no good reason why I should not make the order for security. It may have the effect of putting an end to this appeal. I am fully aware of that.

8. As to the amount of the security, a letter was written originally to Mr Sajnani by the plaintiff asking for security in the sum of $100,000. I have seen a draft bill which puts the likely costs in the Court of Appeal in $170,000 for this relatively simple issue to be resolved in the Court of Appeal costs $170,000 seems to me to be absolutely extraordinary. However, there will be a half day hearing. I think the original request for $100,000 was not unreasonable.

9. In those circumstances I make such an order that security will be in place within 28 days. The appeal will be stayed until the security is in place. Failing the security, the appeal will stand dismissed with costs. As to the nature of the security, cash, a bank guarantee or a banker's bond will suffice or any other security which is satisfactory to the plaintiff. I so order.