UNLIMITED PRODUCTION LTD v. FILMKO PICTURES LTD

CACV 401/2006 & CACV 402/2006

CACV 401/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 401 OF 2006

(ON APPEAL FROM HCA NO. 4219 OF 2002)

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BETWEEN

AND BETWEEN

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CACV 402/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 402 OF 2006

(ON APPEAL FROM HCA NO. 4568 OF 2002)

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D E C I S I O N

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1.  This is the respondents’ Unlimited Production Limited (“Unlimited”) and Mr Yee Tung Sing Derek’s (“Mr Yee”) application for security for costs in respect of the applicant Filmko Pictures Limited’s (“Filmko”) appeal, against the judgment of Deputy Judge Poon (as he then was) dated 18 October 2006.

2.  The only issue between the parties this morning is the amount of security.

3.  There were two actions before the learned judge.

4.  First, HCA 4219/2002, where Unlimited was the plaintiff by original action and Filmko was the defendant by original action.  In that action, Filmko was the plaintiff by counterclaim and Unlimited and Mr Yee were the defendants by counterclaim.

5.  The other action was HCA 4568/2002, where Filmko was the plaintiff and Unlimited and Mr Yee were the defendants.

6.  The two actions were tried together.

7.  After a trial which lasted eight days, the judge found in favour of Unlimited and Mr Yee.

8.  The judgment runs to 35 pages.

9.  I am told that at the trial, 2,500 pages of documents were produced.

10.  At the trial, Filmko was represented by Mr McCoy SC, leading Mr Hylas Chung and Mr Peter Wong.  This morning, Mr D’souza, who appears for Filmko, has informed me about the circumstances under which first Mr Chung and then Mr McCoy came to be instructed below.

11.  But even so, the fact remains that Filmko was represented by three counsel at trial.

12.  On the other hand, Unlimited and Mr Yee were represented throughout by Mr Martin Lee SC, leading Mr Hectar Pun.

13.  The Notice of Appeal which I have seen was signed by all three counsel, who appeared for Filmko below.

14.  The appeal consists basically of a wholesale attack on the judgment, including criticism of the findings of facts made by the judge.

15.  The security sought by Filmko is in the sum of $1,467,326, that is made on a basis of three-day appeal, with two counsel being engaged.

16.  The brief and refresher fees of the two counsel amounted to $1,120,000.

17.  The respondents submitted that the appeal should only take two days, and only one counsel should be instructed.

18.  According to the respondent, only 1,000 documents would be needed for the appeal, but of course, because the appeal included attacks on findings of fact made by the judge, inevitably, all or part of the transcript would have to be provided to the Court of Appeal as well.

19.  That being the case, I am not so sure that the appeal would only take two days, so I would proceed on the basis that the appeal may well take three days.

20.  On the question of two counsel, I do not believe that it would be inappropriate for two counsel to be instructed.  As I have said, both sides were represented by more than one counsel below, and the Notice of Appeal were signed by three counsel on behalf of Filmko.

21.  As for the quantum of counsel’s fees, having regard to the likelihood that on taxation, the full amount would not be allowed, I would provide for a sum of $770,000, which represents roughly 80% of senior counsel’s fees and 50% of the junior counsel’s fees.

22.  As for the solicitors’ costs, the respondent submitted that in 2003, Mr Chung was allowed fees on the basis of an hourly rate of $3,500, but Ms Leung who appears for Unlimited and Mr Yee, submitted that $4,000 an hour should now be allowed.  I agree.

23.  His fees have been calculated on the basis of 42 hours, making a total of $168,000.  Having regard to the complexity of this case and the documentations involved, especially if he or his assistant would have to comb through the documents in order to reduce the number of documents to be put before the court, 42 hours is not unreasonable.

24.  In the case of his assistant, Mr Lin, security is sought on the basis of $3,000 an hour for 10 hours.  I think that is reasonable, presumably Mr Lin would do the initial work which would then be checked by Mr Chung.

25.  Then I turned to Parts I and II, in the total sum of $149,300.

26.  I believe there is substantial duplication in the figures, for example, the bundle of documents for counsel, although there are two appeals arising out of two actions, it is inconceivable that two separate bundles for counsel would be required.  I think the same can be said about the preparation of the respondent’s bundle.  I think the court would not encourage the production of a respondent’s bundle, and I can see no reason why the parties cannot agree on one bundle.

27.  In any event, there should be no duplication between the two bundles.  If a respondent’s bundle has to be prepared, then presumably the applicant’s bundle would be smaller as a result.

28.  All in all, I am not going to go through the $149,000 and then work out the precise figure.  Just using a rough and ready figure, I would put a figure of $60,000 on it.

29.  So the total would be $770,000+$198,000+$60,000 = $1,028,000, that is the figure that I would adopt and the security that I would order.

30.  I would make one composite order covering both appeals:

(1)     The security that I would order in respect of both appeals, is the sum of $1,028,000 and that should be paid in within 28 days of the date of this order;

(2)     Until the security is given, all further proceedings in these appeals be stayed;

(3)     In default of the security being given within 28 days, the two appeals do stand dismissed without further order with costs to be taxed and paid by the applicant to the respondents.

(4)     So far as the cost of this application is concerned, they should be in the cost of the appeal.