XCHRX Ocean Tower Investments Ltd. v. Crown Roy Investment Ltd. and Others

IN THE COURT OF APPEAL

1996, No. 14
(Civil)

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D E C I S I O N

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Ching, J.A. :

1. On the 11th of January this year the Judge below gave summary judgment against the Defendants in the sum of over $185M and interest. Costs were ordered on an indemnity basis.

2. The Defendants' solicitors were, or at least the solicitor involved was, instructed only on the morning of the hearing of the summons but an adjournment was refused. The Defendants have lodged an appeal which it is hoped will be heard on 27th March, 1996. There is some reason for urgency having regard to the fact that part of the property given as security for the debt claimed is being sold. The completion date has already been adjourned on, I think, one occasion.

3. The Plaintiff who was the Respondent now applies for security for the costs of the appeal. The Defendants agreed that they will give security and the only matter in dispute is the amount. The skeleton bill of the Plaintiff is in the sum of a round figure of $750,000. Mr. Ma points out to me that that takes into account only the fees of leading counsel not of junior counsel who, he ensures me, will be instructed and that that junior counsel will not be a straw junior. It is also on the basis that the appeal will only run one day which has been set aside by one of the Vice Presidents of this Court. In the event that the case runs over into a second day the bill will come to something in the region of $950,000 on an indemnity basis. Mr. Ma points out to me that the contractual documents do provide for indemnity costs to be paid and I assume that that was one of the reasons why the Judge below ordered costs on that basis.

4. The Defendants says that the bill is extravagant and that even on the solicitor and own client basis it should be just over $435,000. Mr. Williams who appears for the Defendants says that the bill would be discounted on a party and party basis to the extent that it would come down to about, again in round numbers, $300,000.

5. Mr. Williams attacks the Plaintiff's figures in a number of areas. First he says that the fees generally on the hourly basis or on the brief basis are too high. Secondly he says that there has been provision for too many conferences or conversations or other pieces of work. Thirdly, he questions whether the Plaintiff's solicitors need four people working upon this in their offices. Fourth he says that the Plaintiff will not be involved in anything like the amount of copying which it alleges since it will be for the Defendant to prepare the Appeal Bundles. A number of other points are made.

6. I have found this most difficult but taking the indemnity costs as being $950,000 I must see whether that would be the appropriate figure to order. The documents do broadly provide for indemnity costs to be paid. Although I have only had a quick glance at the costs, it seems to me that there may be room for argument on some of the clauses involved. I think I should err on the side of caution when it is said that four people in the solicitors' office working on the appeal will be necessary and I think I should err on the side of caution when, no doubt with the best will in the world, the Plaintiff's solicitors assert that they will spend many tens of hours in preparing the case, dealing with the Defendants' solicitors and in preparing the documents. But doing the best that I can and I accept that this is a very rough and ready method of doing it, I take the figure of $750,000 and I bear in mind that it may be augmented by an extra day in Court and by the instruction of a junior counsel. I bear in mind also that there may be some deduction from that even upon an indemnity basis by the taxing master. In the circumstances in my view I should order security for costs in the sum of $650,000 to be paid into Court.

7. After hearing both parties, I order :-

(1) Cost of this application to the Plaintiff. The basis of these costs to be reserved to the end of Appeal.

(2) For the avoidance of doubt, the question of whether this application merited leading counsel also to be so reserved.

(3) Payment of the security into Court to be made within 14 days of today. Stay of proceedings pending that payment. Upon failure to make that payment within that period, appeal to stand dismissed without further order with costs to be taxed if not agreed, with liberty to apply on the question of the basis of the costs and generally.

(Charles Ching)

Justice of Appeal