PECONIC INDUSTRIAL DEVELOPMENT LTD v. LAU KWOK FAI AND OTHERS

CACV245, 247 & 248/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NOS. 245 AND 248 OF 2006

(ON APPEAL FROM HCA NO. 3083 OF 2002)

_______________________

BETWEEN

  PECONIC INDUSTRIAL DEVELOPMENT LIMITED Plaintiff
  and  
  LAU KWOK FAI 1st Defendant
  ALBERT K K LUK & CO. (a firm) 2nd Defendant
  K F LAU & CO. (a firm) 3rd Defendant

_______________________

AND

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 247 OF 2006

(ON APPEAL FROM HCA NO. 16255 OF 1999)

_______________________

BETWEEN

  PECONIC INDUSTRIAL DEVELOPMENT LIMITED 1st Plaintiff
  STAR GLORY INVESTMENT LIMITED 2nd Plaintiff
  and  
  CHIO HO CHEONG (陳繼杰) alias  
  CHAN KAI KIT (陳繼杰) 1st Defendant
  ELSIE CHAN YIK-SZE 2nd Defendant
WONG HING HANG 3rd Defendant
LEUNG HIU LING 4th Defendant
WONG SHIU-WAI 5th Defendant
CHEN JUN-YI 6th Defendant

_______________________

Before: Hon Rogers VP in Chambers

Date of Hearing: 6 July 2007

Date of Decision: 6 July 2007

D E C I S I O N

1. These are three applications for security for costs. The total sum of security in respect of all three is said to be some $2 millionor more. The amounts have not been divided between the various Defendants and it is suggested that I might like to order a thirdagainst each. This is not a course which really appeals to me.

2. Having had a look at the skeleton bill of costs, all I can say is that no effort has been made to reduce costs in any way. Thebill is, if anything, inflated. The amount sought on the security is the highest that has come before this Court in the 10 yearsthat I have been dealing with security for costs on appeal and that tells me something. It tells me that there must be some meritin the appeals. I have looked at the judgment below; I have looked at the notices of appeal and I have read the skeleton argumentsand all I am prepared to say now is that I am not prepared to discount the fact that there are grounds of appeal which should beargued.

3. Each of these three Defendants is impecunious. There is no way that they could possibly afford, it seems to me, the damages thathave been awarded against them of over $300 million. It is really accepted that if security were awarded in anything like thesesort of amounts which the Plaintiffs are talking about, this would stifle the appeals. I have to say that I do not consider thatis right.

4. In respect of two of the parties where security for costs is sought, there are Mareva injunctions on foot and that seems to me toprotect the Plaintiffs as much as any order for security for costs.

5. One further matter that I would raise at this stage is this, that the suggestion is always made when security for costs is soughtthat the person against whom the security is sought can borrow the money and can seek to raise the money somewhere else. I havenever been enamoured with that suggestion. In respect of companies, it may be correct, but in respect of individuals, I am not surethat it ever was correct. Nowadays, where it has now been established that anybody who is prepared to finance litigation will becomeat risk as to payment of costs to the opposing party, I find that it is, perhaps, something which needs looking at again as to whetherthat is an appropriate approach by the court to the question of security for costs.

6. In any event, for the other reasons which I have explained, I consider that this is not an appropriate case for security for costs. These are appeals which have been set down for five days in November. There seem to me to be substantial arguments on the appealsand they should go ahead and these appeals should not be stifled.

(Submissions by counsel on costs)

7. Costs in the appeal.

  (Anthony Rogers)
Vice-President

Mr C W Ling, instructed by Messrs Raymond T Y Chan Victoria Chan & Co., for the Plaintiff/Respondent

Mr Jin Pao, instructed by Messrs Robin Bridge & John Liu, for the 1st & 3rd Defendants in HCA 3083/2002/Appellants in CACV248/2006

Mr Bernard Mak, instructed by Messrs Andrew Law & Franki Ho, for the 2nd Defendant in HCA 3083/2002/Appellant in CACV 245/2006

Ms Jane T C Ho, instructed by Messrs David Y Y Fung & Co., for the 4th Defendant in HCA 16255/1999/Appellant in CACV 247/2006

Application for leave to appeal to Court of Appeal by the plaintiff allowed. Please refer to CACV245/2006 and CACV248/2006 dated 12June 2008