|
CACV 17/2006
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
CIVIL APPEAL NO. 17 OF 2006
(ON APPEAL FROM HCA NO. 1647 OF 2004)
______________
BETWEEN
| |
CSI INVESTMENT MANAGEMENT LIMITED |
Plaintiff |
| |
and |
|
| |
KE JUN XIANG |
Defendant |
______________
Before: Hon Tang JA in Chambers
Date of Hearing: 21 March 2006
Date of Decision: 21 March 2006
_______________
D E C I S I O N
_______________
1. The plaintiff’s claim against the defendant is based on 4 dishonoured cheques for a total sum of $1,600,000.
2. Summary judgment was given in favour of the plaintiff by Master Au Yeung on 2 August 2005. She also made a gross sum costs order of $70,000.
3. The defendant’s appeal against the order of Master Au Yeung was dismissed on 21 December 2005.
4. This is the plaintiff’s application for security for costs in respect of the defendant’s appeal to this court. The amount of security sought is $500,000.
5. On the material before me, I am satisfied that security should be ordered.
6. The defendant is a Mainland resident and is not ordinarily resident in Hong Kong.
7. It seems that the only asset of the defendant are shares in CIL Holdings Ltd (a listed company) trading of which has been suspended since 1 April 2004.
8. It seems that the shares had been used as security for loans including a loan of $35,000,000. These shares are also owned, it is said, by the defendant via a BVI company.
9. According to the defendant, CIL is the plaintiff in High Court Action No. 2725 of 2001 and has a claim for $98,000,000 and that substantial recovery in the near future could be expected.
10. It is also the defendant’s case that the shares of CIL has substantial residual value.
11. The evidence before me is not sufficiently clear to satisfy me that I can place weight on such allegation.
12. In any event, it is not the defendant’s case that he is not in the position to pay any security ordered.
13. As for the merits of the appeal, I think I would say no more than that the defendant would face an uphill battle, and certainly this is not a reason on which I should refuse security.
14. So for those reasons, I would make an order for security for costs. As for the quantum of $500,000, the plaintiff originally made the application on the basis that it would instruct a leading and a junior counsel. But in the submission, Ms Lorinda Lau, who appeared on behalf of the plaintiff, indicated in response to a question put to her by me, that the plaintiff would regard a sum of $120,000 as appropriate.
15. I believe $500,000 is disproportionate to the amount claimed and to the nature or complexity of the claim.
16. As I have said, a gross sum costs order was made in the sum of $70,000 before the master, and that there is a letter dated 5 January 2005 (sic) in the bundle, which although marked without prejudice has not been objected to on that ground, where it seems that for the costs before Deputy Judge Muttrie, the plaintiff was prepared to accept a sum of about $150,000 in lieu of taxation.
17. Mr Douglas Lam, appearing for the defendant, submitted that security should not be ordered. First, because the defendant has means and I have already dealt with that. Secondly, he said security should not be ordered in a case where the application for security itself might involve expenditure of costs similar to, if not greater, than the costs which the plaintiff might have to incur if the appeal were to go ahead.
18. I do not think that it is a good reason to refuse security in this case. Moreover, I do not believe that the costs incurred in this application is likely to exceed the costs of the actual appeal.
19. Furthermore, if the plaintiff has good reason to seek security and the defendant has no good reason to refuse to provide security, I cannot see why the fact that it would cost the plaintiff money to apply for security, is itself a good reason for refusing security in favour of the plaintiff. Should that be the case, it will only encourage the recipient to a request for security to refuse to offer security even when security should have been offered.
20. So far as the quantum is concerned, Mr Lam suggested that $45,000 should be sufficient. He mentioned the fact that the costs below included the costs incurred in the preparation of affidavits and there were affidavits both before the master and before the judge. And on the appeal to this court, it is unlikely that any additional affidavit evidence would be admissible or forthcoming.
21. Be that as it may, I believe I would order security in the sum of $120,000 to be provided within 28 days of today, otherwise on the usual terms.
22. I order accordingly.
| |
(Robert Tang)
Justice of Appeal |
Ms Lorinda Lau, instructed by Messrs Eddie Lee & Co., for the Plaintiff.
Mr Douglas Lam, instructed by Messrs Charles Wong & Co., for the Defendant.
|