Yat Tung Investment Co Ltd and Another v. Dao Heng Bank Ltd
Read the full judgment text of CACV 23/1971 on BabelCite. This Court of Appeal judgment.
1. The trial of O.J. action 969 of 1969 lasted 13 days. Judgment was given by Mr. Justice Pickering in favour of the defendant bank which was represented by 2 counsel - Mr. Gittins, Q.C. and Mr. Ching. On 4th June 1971 the defendant's costs were taxed at $52,225.50, the fees in respect of the 2 counsel being allowed by the taxing master.
|
CACV000023/1971 IN THE SUPREME COURT OF HONG KONG (APPELLATE JURISDICTION) CIVIL APPEAL NO. 23 OF 1971 (On appeal from O.J. 969 of 1969) -----------------
----------------- Coram: Full Court (Blair-Kerr, S.P.J. and McMullin, J.) Date of Judgment: 12 OCT 1971 ----------------- JUDGMENT ----------------- Blair-Kerr, S.P.J.: 1. The trial of O.J. action 969 of 1969 lasted 13 days. Judgment was given by Mr. Justice Pickering in favour of the defendant bank which was represented by 2 counsel - Mr. Gittins, Q.C. and Mr. Ching. On 4th June 1971 the defendant's costs were taxed at $52,225.50, the fees in respect of the 2 counsel being allowed by the taxing master. 2. On 3rd June 1971, the plaintiffs filed notice of appeal; but they have not yet filed any other papers. On 16th September the defendant (respondent) applied to this Court under s.357 of the Companies Ordinance for an order for security for the costs of the appeal, for a stay until such security be given, and, in default of such security being given, for an order that the appeal stand dismissed without further order. We made an order in terms of the application, the sum fixed being $18,000. We now record the reasons for our decision. 3. There was uncontradicted affidavit evidence to the effect that the appellants had not paid the respondent's costs in the court below, that they were not carrying on business at their registered addresses, and that they had no means of paying the costs of the appeal in the event of their being unsuccessful. 4. As regards the application for security, the dispute between the parties was as to quantum only. The respondent's solicitors had requested the appellants to pay $25,000 by way of security for the costs of the appeal. The appellants' solicitors had offered to pay $6,000. 5. From a perusal of the judgment in the court below and the grounds of appeal, clearly the appeal will be mainly against the learned judge's findings of fact. This will necessarily involve a careful examination of what, we were told, is a rather voluminous record. Counsel for the respondent estimated that the appeal would last at least 5 days, and his estimate was not questioned by counsel for the appellants. As the taxing master had allowed the fees paid to the two counsel in the court below, we had no reason to think that he would not adopt a similar approach if and when he was called upon to tax the respondent's bill of costs in respect of the appeal. 6. Under 0.23 a plaintiff may, in certain circumstances, be ordered to give security for a defendant's costs. In regard to this, the learned editors of the 1970 Supreme Court Practice have this to say (p.365):-
7. Under O.59 r.10(5) the Full Court may "in special circumstances order that such security shall be given for the costs of the appeal as may be just"; and, as the learned editors of the 1970 Supreme Court Practice say (p.796/7), "the grounds upon which security for costs of an appeal may be ordered are those upon which security for the costs below might be ordered (see 0.23 nn.)." 8. The notes to O.23 in the Supreme Court Practice make reference to s.447 of the Companies Act 1948. That section is in substantially the same terms as s.357 of the Companies Ordinance, Cap. 32. The latter section reads:-
9. Counsel for the respondent cited The Australian Steamship Company Ltd. v. Fleming(1), Imperial Bank of China, India and Japan v. Bank of Hindustan, China and Japan(2), and The Dominion Brewery Ltd. v. Foster(3). In The Australian Steamship Co. case(1) the application was made under a section of The Joint Stock Companies Act 1857 which section was in substantially the same terms as s.357 of Cap. 32. Apparently, in those days the usual practice of the court was to order security in the form of a bond for £100. Counsel for the plaintiffs in the Australian Steamship Co. case(1) submitted that his clients should give "the usual security". In regard to this, the Solicitor General's submission is recorded thus (p.170):-
10. In the Imperial Bank of China case(2), and in the Dominion Brewery case(3) the applications for security were made under s.69 of the Companies Act 1862 which section was also in substantially the same form as s.357 of Cap. 32. In the former of these two cases Wood V.C. had ordered the plaintiffs to enter into a bond for £100. This decision was reversed on appeal. Sir J.L. Knight Bruce L.J. said:-
11. In the Dominion Brewery case(3) Lindley M.R. said (p.508):-
And Chitty L.J. said (p.508):-
With respect I entirely agree that a court is not "bound" to do so: Counsel's estimate of the time required for the hearing of a trial or an appeal may be excessive. The court may have had an opportunity of studying the pleadings, or, in the case of an appeal, the grounds of appeal, the judgment, and the record of the evidence; and, in the light of such study, it may itself have formed a preliminary view of the probable number of days required for the trial, or the hearing of the appeal, as the case may be. On the other hand, in Hong Kong counsel frequently under-estimate the length of court time required; and, speaking for myself, I would say that in these courts underestimation by counsel occurs far more frequently than over-estimation. 12. Again, a party's bill of costs may be taxed down by the taxing master. There are many factors to be considered. But, with respect to the Master of the Rolls, I find the greatest difficulty in accepting as a general rule that "the chance of a case collapsing without coming to trial" is a matter for consideration in deciding on quantum of security. In Hong Kong (as in England) actions are frequently settled prior to the dates fixed for hearing. The strength or weakness of the plaintiff's claim may have little bearing on the parties' decision to settle, which may have been prompted by extraneous considerations. No court should be asked to guess what are the chances of an action being settled prior to trial. And, as regards appeals, although it is open to an appellant who does not desire to prosecute his appeal, to present a request for it to be dismissed, it is not open to parties to "settle" an appeal; and no court should be asked to assess the chances of an appeal; and no court should be asked to assess the chances of an appeal being dismissed in this way without a hearing. 13. What is clear from the authorities is that the "two-thirds" yardstick which is the conventional approach in the case of an application for security for costs does not apply where the plaintiff, or appellant, is a limited company and, upon an application under s.357 of Cap. 32, it appears by credible testimony that there is reason to believe that the company will be unable to pay the costs of the defendant, or respondent, if such defendant should obtain judgment or the appeal should be dismissed, as the case may be. In such a case, it is the duty of the Court to make a genuine attempt at estimating what party and party costs are likely to be allowed to a successful defendant, or respondent, upon taxation and the sum fixed by way of security should ordinarily approximate to that figure. Courts of law must assume that by the repeated use, over the years, of the word "sufficient", the legislature intended this word to have its ordinary meaning. 14. But, how is a court to estimate the probable costs? There is a note in the 1970 Supreme Court Practice at the foot of p.346 which reads:-
During the 12 years I have been on this bench, I have not seen a single case in which an applicant for security for costs has filed a skeleton bill. What happens is that there is a certain amount of vague argument as to the probable length of the hearing and perhaps the number of counsel involved; but no mention is ever made of what fees counsel are likely to be allowed on taxation, or as to solicitors' costs, or fees for conferences, disbursements, and so on. This Court considers that when a party applies for security for costs, he should, in support of his application, file a skeleton bill of costs for the convenience of the Court. 15. In the present case, doing the best we could on the information available, we fixed the security at $18,000. That was on the assumption that the appeal would last "at least 5 days", (as counsel put it) and that the fees of 2 counsel would be allowed by the taxing master in the event of his being called upon to tax the respondent's costs. 16. Since the hearing of this appeal the Registrar, at my request, has supplied me with certain figures relating to other recent taxations. The case which comes closest to this appeal appears to be Civil Appeal No. 34 of 1969. The hearing lasted six days. The costs of the respondent, who was represented by one counsel, were taxed and allowed at $19,876. 17. The following table showing the results of a number of other taxations during the last few years may be of assistance in future cases:- Civil Appeals
18. The following taxations in certain Original Jurisdiction Actions may also be of interest:-
19. As regards O.J. 539/67, the 1st defendant's costs have not yet been taxed; but a communication from the solicitors concerned indicates that the bill which will be submitted for taxation will be somewhere between $80,000 and $100,000. 20. Of course, there have been some exceptionally long cases tried in these courts during the last few years. In Brentwood Wig Manufactory Ltd. v. Poncher(1), it does not appear from the court file that the successful parties (plaintiffs) taxed their costs; but on an application by the defendants for a stay pending appeal, counsel for the plaintiffs indicated to the court (p.653) that he anticipated that the plaintiffs' costs would be taxed in the region of $250,000. 21. The Assistant Registrar of this court (speaking as taxing master) has informed me that "in the ordinary run-of-the-mill case such as an ordinary running down action," he normally allows a brief fee of $1,500-$2,000, and $600-$300 daily refreshers. Of course, in complicated actions the figures may be higher. In the ordinary case, brief fees allowed for leading counsel vary between $3,000-$4,000 with $1,000 daily refreshers. 22. However, it will be seen from the above figures that the number of counsel involved and the length of the hearing are only 2 of the many factors to be considered when taxing a bill of costs; and it has to be remembered that some judges have never had experience of drawing bills of costs and attending taxations thereof. I therefore repeat what I said earlier that when applying for security for costs, the applicant should support his application by a rough skeleton bill of anticipated costs.
Representation: Denis Chang instructed by D'Almada Remedios & Co. for Appellants. Charles Ching instructed by Patrick Poon & Co. for Respondent (1) (1966) H.K.L.R. at p.643. |