UBC (CONSTRUCTION) LTD. v. SUNG FOO KEE LTD.

Construction List No. 11 of 1991

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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BETWEEN

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J U D G M E N T

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1. By a summons dated 3rd November 1992 the Defendants seek further security for costs in the amount of $500,000.

2. This trial is due to start before me on 1st December 1992.

3. The first application for security was made by summons dated 3rd November 1991. On 13th January 1992 I dismissed the application on the basis that I was not satisfied that there was credible evidence that the Plaintiffs would not be able to pay the costs of they lost. I,held however that the amount of $400,000 claimed at the stage was reasonable.

4. On 19th June 1992 the Court of Appeal allowed an appeal from my decision on the basis that they were satisfied that there was sufficient credible evidence.

5. There then ensued about a month of wrangling relating to the terms of the guarantee which I have not found at all edifying and which displayed a degree of awkwardness on the part of the Defendants.

6. I am satisfied that the pre conditions for security still exist namely the-Plaintiffs will not be able to pay the costs if unsuccessful. I must ignore that fact that if security is ordered the Plaintiffs backers will provide the security.

7. At the end of the oral hearing on this summons I refused to order security and now set out very briefly my reasons for so doing.

    (1) This is a very late application and I can see no reason why it should not have been made earlier.

    (2) I am not satisfied that the reason for the alleged extra cost can be attributed solely to the amendments to the Statement of Claim which were made as soon as security had been provided. Further some part of these extra costs must be attributable to late amendments made by the Defendants not consequent on the Plaintiffs' amendments.

    (3) There is no sufficient explanation given by the defendants' solicitors as to why the number of hours has increased from 190 to 442 and in this regard I note that there have been a number of applications which the Plaintiffs won and got their cost yet no allowance appears to have been made for this.

    (4) I also note from Miss Siu's affidavit that the Defendants appear to owe the Plaintiffs $1,152,500 according to a request for confirmation of balances. I was told that $500,000 of this sum relates to retention monies allegedly due on this contract and the balance relates to another contract. I believe that I am entitled to take this into account. If the Defendants' counterclaim fails then this retention money will be returnable to the Plaintiffs. The counterclaim relates to a claim for monies certified and paid to the Plaintiffs which the Defendants now contend should not have been paid.

    (5) One factor that I am entitled to consider is whether this application is oppressive. Since I last dealt with security I have had considerable contact with this case and have read affidavits and pleadings as well as hearing oral submissions. I have also read some correspondence between solicitors. I have no idea as to who is going to win this case but I have gained the impression that the Defendants are conducting this case in such a manner as to place the Plaintiffs under maximum pressure. A judge gets a feel for the way a case is being handled and I feel that this application, coming when it does, is just part of the Defendants game plan. They say, through Miss Cheng, that they do not want the case adjourned but they do not know any more than I do how long it will take the Plaintiffs to comply with an order if made. The last thing one wants, two and a half weeks before trial, is for there to be a stay of proceedings for part of that time. I have come to the conclusion that this application is oppressive.

    (6) I also take into account that it is clear from what I know about this matter that the Plaintiffs present financial position is due in large measure to the fact that they have this large claim outstanding against this substantial contractor in respect of a large project.

8. I have given consideration to all the matters raised in miss Cheng's helpful skeleton and the cases therein cited.

9. In coming to the conclusion that security should be refused I have had regard to the notes to order 23 and in particular to the observations of Lord Denning in Lindsay Parkinson v Triplan (1973) QB 609.

10. This application is dismissed with costs.