RE THE TRANSWARD NO. 27

HCAJ94/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO.94 OF 2002

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Admiralty action in rem against : the dump steel lighter
"TRANSWARD NO.27"

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J U D G M E N T

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1. This is an application for security for costs by the defendants against the plaintiffs, the defendants having already given security to avoid the arrest of the vessel in the sum of US$100,000. The amount of security for costs that the defendants are seeking is in the sum of HK$200,000 for costs up to and including the stage of discovery. The application is resisted by the plaintiffs.

2. This is a straightforward application for security for costs. There is no doubt that the plaintiffs are foreign plaintiffs, and the general rule is that a foreign plaintiff with no business and assets in Hong Kong should give security for costs. The plaintiffs, however, resisted the application. I find it difficult to understand since the plaintiffs really are cargo-underwriters and have no difficulty in giving security. The plaintiffs' reason basis for resisting security for costs, as I understand it, is that the plaintiffs have a very very strong case. I am not certain that it is necessarily the situation although this is a bailment and it is bailment on terms. There are quite extensive terms that have been relied upon as defences by the defendants.

3. I think it is by no mean certain that the plaintiffs will win at the end of the day. Certainly, if the plaintiffs are so confident that they will win and have an overwhelming case or a sure-win case, they could have and should have taken out Order 14 but they have not done so. From the amount of discovery that has been pursued, it seems to me that this is a case which is by no means certain, even less overwhelmingly certain, that the plaintiffs could win. So, I think the ground of resisting the defendants' application for security for costs is wholly misconceived. This is a straightforward case where security for costs ought to be given.

4. As to the amount of the security, there are various criticisms made by Miss Man, for the plaintiffs, against the skeleton bill (a three-page skeleton bill of costs) put forward by the defendants. The amount that Miss Man suggests ought to be ordered as security in the sum of HK$71,000 is about one-third of the amount that is applied for by the defendants. I think although there may be certain areas where the defendants' skeleton bill might be considered to be somewhat extravagant or excessive, there is simply no basis for the court to reduce it by two-thirds. In my view, the proper sum that the court should order for security for costs is in the sum of HK$150,000. That is the amount that the plaintiffs should put up as security for costs. The reasonable time for doing that is 21 days.

5. So, I order security for costs in the sum of HK$150,000, to be furnished within 21 days from today and the action will be stayed pending the giving of the security. The costs of and occasioned by this application be to the defendants in any event.