CHESTERTON PETTY LTD. v. FRED GROENEVELD

CACV 69/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 69 OF 2000

(ON APPEAL FROM DCCJ NO. 22979 OF 1998)

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J U D G M E N T

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1. In this action the Plaintiff obtained judgment in the District Court against the Defendant for the sum of $56,508.00 plus interest at the rate of 11.5% per annum from 3 November 1998. The Defendant has been granted leave to appeal to the Court of Appeal. The Plaintiff now applies for security for its costs of the appeal. Those costs are estimated to be $368,000.00. The application is made on the basis that if the Defendant is ordered to pay the Plaintiff's costs of the appeal, the Plaintiff may not be able to enforce that order. That is because the Defendant is Dutch, he is only living in Hong Kong temporarily and he does not have any assets in Hong Kong.

2. I have decided to dismiss this application. I am not satisfied that the Plaintiff will be unable to enforce any order for its costs of the appeal. It is noteworthy that the Defendant has lived in Hong Kong for three years already, his contract of employment commits him to work in Hong Kong until June 2002, and his current employment visa does not expire until the summer of 2002. Although the company by whom he is employed is a subsidiary of two Dutch companies, the company itself is incorporated in Hong Kong. The Defendant's remuneration and his package of benefits are such that he should be able to afford to pay the Plaintiff's taxed costs of the appeal. It is to be noted that within three days of receiving the sealed copy of the judgment the Defendant had paid the judgment debt plus the interest which had accrued on it.

3. In any event, the Defendant's employer has, through the Defendant's solicitors, informed the Plaintiff's solicitors that it will pay the Plaintiff's costs if the appeal is dismissed. That offer, which was contained in correspondence, may be unenforceable at present, but the Defendant's solicitor has confirmed to me today that the Defendant's employer is prepared to undertake to the court that it will indemnify the Plaintiff in respect of its costs of the appeal if the Defendant is ordered to pay them. That indemnity may be worth very little, but I accept the undertaking, and it will be incorporated in the order which I make.

4. I should add two things. First, a sense of proportionality should be brought to bear on this dispute. On a claim of this size, I would be very reluctant to secure the Plaintiff's taxed costs in a sum so significantly greater than the judgment debt. Secondly, I fear that there has been some exaggeration as to the Plaintiff's estimate of its costs. I think that there is no realistic chance of disbursements to counsel being taxed at $250,000.00 which is what the Plaintiff's Skeleton Bill of Costs estimates. Nor do I think that the Plaintiff's solicitors will be able to justify spending anything like the 37 hours which is again what the Skeleton Bill of Costs estimates will be the amount of time which the Plaintiff's solicitors will be devoting to the case in the future.

5. For these reasons, this application is dismissed.