WONG KAM SAN AND OTHERS v. ZHAO KAI INVESTMENT LTD AND OTHERS

WONG KAM SAN AND OTHERS v. ZHAO KAI INVESTMENT LTD AND OTHERS

The defendants discharged the burden of proving that the 1st plaintiff is ordinarily resident outside Hong Kong and the plaintiffs produced no affidavit to contradict this. The court found the plaintiffs' claimed assets were unreliable or encumbered (self valuation of properties and uncertain value of the mine). Balancing the factors and the existence of the properties as partial security for an undertaking, the court exercised its discretion under Order 23 rule 1 to order security for costs in the sum of HK$1.2 million to be deposited within 14 days, failing which the action as against the 1st, 5th, 6th and 7th defendants is stayed.

Citation
WONG KAM SAN AND OTHERS v. ZHAO KAI INVESTMENT LTD AND OTHERS
Parties
1st Plaintiff: WONG KAM SAN; 2nd Plaintiff: WONG LAI CHING; 3rd Plaintiff: LIU YONG; 4th Plaintiff: TRENGEI DEVELOPMENT LIMITED; 1st Defendant: ZHAO KAI INVESTMENT LIMITED; 2nd Defendant: YEUNG WING KEUNG; Defendant: 3rd Defendant; Defendant: 4th Defendant; Defendant: 5th Defendant; Defendant: 6th Defendant; Defendant: 7th Defendant
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
4 March 2006
Case Number
HCA1653/2004
Procedural Posture
Civil Security for Costs Application / Interlocutory Application (order 23 Rule 1)
Outcome
Security for costs ordered; action stayed as to specified defendants in default of compliance
Legal Topics
Security for Costs, Nominee Shares, Trusts, Jurisdiction/residence
Source Language
EN
Civil Procedure Company Law Equity and Trusts Security for Costs Nominee Shares Trusts Jurisdiction/residence

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Parties

WONG KAM SAN

1st Plaintiff

WONG LAI CHING

2nd Plaintiff

LIU YONG

3rd Plaintiff

TRENGEI DEVELOPMENT LIMITED

4th Plaintiff

ZHAO KAI INVESTMENT LIMITED

1st Defendant

YEUNG WING KEUNG

2nd Defendant

3rd Defendant

Defendant

4th Defendant

Defendant

5th Defendant

Defendant

6th Defendant

Defendant

7th Defendant

Defendant

Procedural Posture

Civil Security for Costs Application / Interlocutory Application (order 23 Rule 1)

Legal Issues

  1. 1 Whether the plaintiffs are ordinarily resident outside Hong Kong
  2. 2 Whether security for costs should be ordered under Order 23 rule 1 of the Rules of the High Court
  3. 3 Whether the plaintiffs possess adequate assets to cover potential adverse costs orders

Ratio Decidendi

The defendants discharged the burden of proving that the 1st plaintiff is ordinarily resident outside Hong Kong and the plaintiffs produced no affidavit to contradict this. The court found the plaintiffs' claimed assets were unreliable or encumbered (self valuation of properties and uncertain value of the mine). Balancing the factors and the existence of the properties as partial security for an undertaking, the court exercised its discretion under Order 23 rule 1 to order security for costs in the sum of HK$1.2 million to be deposited within 14 days, failing which the action as against the 1st, 5th, 6th and 7th defendants is stayed.

Court Disposition

Security for costs ordered; action stayed as to specified defendants in default of compliance

Orders

  • Plaintiffs to deposit HK$1.2 million into court within 14 days as security for costs of the 1st, 5th, 6th and 7th defendants
  • In default of deposit, the action as against the 1st, 5th, 6th and 7th defendants is stayed