IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
CIVIL APPEAL NO. 116 OF 2008
(ON APPEAL FROM HCA NO. 1221 OF 2006)
Before: Hon Rogers VP in Chambers
Date of Hearing: 18 July 2008
Date of Decision: 18 July 2008
D E C I S I O N
1. This is an application for security for costs in respect of an appeal.
2. The action in the court below took 23 days. The judgment is extensive.
3. It suffices to say that the grounds of the appeal appear to me to really revolve around questions of fact, apart from one matter,to which I will refer in a moment.
4. They are dressed up as questions of law, but they really amount to questions of fact, and in that respect I have to refer to whatthe judge said when he was dealing with the question of costs between the plaintiff and the 1st and 3rd parties’ costs, becauseat paragraph 164 he said:
5. Well, those are very strong words and, when it is considered that the appeal is now sought to be brought against the findings offact, one can only say that it does not start off on a very optimistic note.
6. One matter which has been raised during the course of argument this morning is the question as to whether the 51 per cent of theshareholding in UR Limited was, in effect, charged equitably. The short answer to that, as was pointed out by Ms Chan on behalfof the plaintiff and the 1st Third Party, was that were the defendants to succeed on their main case or on their main defence, theywould end up without any shares anyway, so this particular defence, or this particular point, cannot really affect the total outcomeof the case.
7. In my view, the main question to be decided this morning is whether the defendants should be required to give security on the basisthat they are impecunious, and it does seem to me that, on what little I have seen of this case, there are grounds for it to be consideredthat the defendants have no ready assets available for the payment of costs. It is said that the land in question, which is in Beijing,may be very valuable. Well, that may be the case; but, on the other hand, that is a question of satisfaction of the judgment, andMs Chan challenges the allegation on the basis that there are many other debts which also have to be paid out of that amount or theproceeds of sale of any land.
8. But in any event, that does not indicate that the defendants would be in a position to pay the costs. What would have to happenis there would have to be some sort of liquidation or sale.
9. In my view, this case therefore is one where security should be required from the defendants, and the question is how much.
10. I have looked at the estimate of the costs, and I approach this case really on two bases. If the matter were in this court, I considerthat probably, on the basis of the notice of appeal, I doubt that it would go more than about two days. It is possible that thecase could go longer, and therefore I approach it on that basis. I have looked at the scale of fees which are charged, and whatI have to do is not to consider the particular counsel who are involved or particular legal representatives who are involved, andI make no criticism of their fees whatever. What I have to consider is what representation the plaintiffs might be able to obtainand the cost of it.
11. All in all, based on a two-day hearing in this case or a longer hearing, I consider an appropriate amount of security would be about$1.2 million in this case, and I propose to make an order that security for that amount should be provided.
12. The order that I will make is that:
Ms Linda Chan, instructed by Messrs Alfred Lam, Keung & Ko, for the Plaintiff and 1st Third Party/Respondents
Ms Angela Gwilt, instructed by Messrs Tsui & Co, for the 1st and 2nd Defendants/Appellants