Tang Chung Wah, Alan (also known as Alan Tang) v. Grant Thornton International Ltd

CACV 99/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 99 OF 2016

(ON APPEAL FROM HCSD NO. 32 OF 2015)

________________________

BETWEEN

________________________

________________________

J U D G M E N T

________________________

1.This is an application of the respondent, Grant Thornton International Limited (“GTIL”), for security for costs of an appeal brought by the appellant Tang Chung Wah also known as Alan Tang (“Mr Tang”) against the decision of Recorder Linda Chan, SC on 22 March 2016. The learned recorder dismissed Mr Tang’s application to set aside a statutory demand issued by GTIL seeking payment of judgment debts awarded against him.

2.The Registrar of Civil Appeals gave directions on 8 June 2016 for the conduct of this summons.  Having read the affirmations and submissions filed by the parties, I consider it appropriate to determine the application on paper without a hearing.

3.The application for security was made on the basis that GTIL will likely encounter undue delay and be put to undue expense in enforcing any order for costs in respect of the appeal.

The entitlement to security for costs

4.In the affirmation of Mr Tang filed in opposition to the summons, he opposed the application both as to GTIL’s entitlement to security and the quantum of security.  In the submissions filed on his behalf, it was stated that he has “no further comment” on GTIL’s entitlement to security but disputes the quantum sought.

5.As it is not wholly clear whether Mr Tang no longer disputes the entitlement to security, I will deal with this succinctly.

6.In a previous decision on security for costs on appeal I gave in another appeal (CACV 193/2013) involving GTIL and Mr Tang[1] on 10 April 2014, I concluded that GTIL had established special circumstances making it just to order security against Mr Tang.  In essence, Mr Tang has a history of failing to pay the judgment debts and costs orders made against him, and there was no evidence of substantial assets in Hong Kong readily available for enforcement.

7.There has been no change in circumstances since that previous decision, other than the fact that the judgment debts owed by Mr Tang to GTIL have increased as compared to the indebtedness in 2013.

8.I am satisfied that GTIL will likely encounter undue delay and be put to undue expense in enforcing any order for costs in respect of the present appeal, and it is appropriate to order Mr Tang to provide security for costs.

The amount of security

9.In the skeleton bill of costs provided by GTIL, the costs of the appeal and of the application for security for costs were estimated at $686,625.10.  In the statement of costs for summary assessment of the application for security for costs, the total amount claimed was $80,500.  There is an element of duplication of the two.

10.In the present summons, the amount of security sought was $480,000. GTIL explained that the lower figure was put forward rather than the estimated costs because it recognised that it would not be awarded the full amount in view of the current recovery rate due to the present scale rate for solicitors.

11.In an attempt to avoid the need for an application, GTIL had in an earlier letter of its solicitors to Mr Tang’s solicitors offered to accept $350,000 as security for costs of the appeal.

12.Mr Tang’s position is that a sum of no more than $120,000 should be ordered as security, and that the costs of the application for security should be no more than $10,000.

13.I have considered his grounds advanced for disputing quantum in his affirmation and the submissions filed on his behalf.  I do not think the figures he put forward are realistic.

14.In considering an appropriate amount to order as security, I have taken into account the amount of costs assessed by the recorder on a gross sum basis for the application to set aside the statutory demand before her.  She had reduced the legal costs of GTIL from $580,504 to $293,000, of which $175,000 was counsel’s fees.

15.I have considered the grounds of appeal.  The ambit of the arguments on appeal would be narrower than the arguments before the recorder.

16.I also have regard to the amount of security I ordered against Mr Tang in CACV 193/2013, which was $250,000 inclusive of the costs of the application for security.  But it is pertinent to note that those were the fees considered two years ago.

17.In my view, a reasonable sum to order as security in this instance is $300,000, inclusive of the costs of the application for security for costs, which I have reduced from $80,500 to $70,000.  The balance of $230,000 is made up of solicitors’ costs of $100,000 and counsel’s fees of $130,000.

18.I make the following orders:

(1)  the appellant do within 28 days hereof give security for the respondent’s costs of the appeal in CACV 99/2016 in the sum of $300,000 by making lodgement in court of the said sum by cash or bankers draft, or by provision of a bank guarantee of like amount, which guarantee shall have been approved by the Registrar; and until such lodgement be made and notice thereof given to the Registrar and to the solicitors for the respondent (such notice to be given on the same day as the lodgement is made) all proceedings in the said appeal are to be stayed;

(2)  in default of the appellant making such lodgement as aforesaid within the time specified, the said appeal do (upon the solicitors for the respondent certifying such default to the Registrar) stand dismissed out of this court without further order;

(3)  in the event that the appeal is dismissed in the circumstances provided for above, the appellant do pay to the respondent the costs occasioned by the appeal, such costs to be taxed if not agreed; and

(4)  the costs of this application, assessed on a gross sum basis at $70,000, be to the respondent in any event.

Written submissions by Joseph Li & Co, for the Applicant (Appellant)

Written submissions by O’Melveny & Myers, for the Respondent (Respondent)

[1] There were other parties in those proceedings but GTIL and Mr Tang were the main protagonists.