CHINA TREASURE CO LTD v. RICH LONG LTD

CHINA TREASURE CO LTD v. RICH LONG LTD

There was credible evidence that the Plaintiff lacked substantial assets beyond its $10,000 paid up capital, had directors/shareholders resident abroad, and no evidence that controllers would fund any costs order; given that and the limited strength of the Defendant's defence, the exercise of discretion to order security was justified and the Master's order for $400,000 security was upheld.

Citation
CHINA TREASURE CO LTD v. RICH LONG LTD
Parties
Plaintiff/appellant: Plaintiff; Defendant/respondent: Defendant
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
28 April 2006
Case Number
HCA70/2003
Procedural Posture
Civil Appeal Concerning Security for Costs Under Companies Ordinance / Appeal From Master's Order; Hearing in Chambers; Judgment on Appeal
Outcome
Appeal dismissed
Legal Topics
Security for Costs, Summary Judgment, Set Off, Authority of Signatory, Ownership of Funds, Exercise of Judicial Discretion
Source Language
EN
Company Law Civil Procedure Costs Banking Law Contract/agency Security for Costs Summary Judgment Set Off +3 more

Case Brief

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Parties

Plaintiff

Plaintiff/appellant

Defendant

Defendant/respondent

Procedural Posture

Civil Appeal Concerning Security for Costs Under Companies Ordinance / Appeal From Master's Order; Hearing in Chambers; Judgment on Appeal

Legal Issues

  1. 1 Whether there is credible evidence to believe the plaintiff will be unable to pay the respondent's costs
  2. 2 Whether the court should exercise its discretion to order security for costs under section 357 Companies Ordinance
  3. 3 Whether monies passing through the plaintiff's account were owned by the plaintiff or held as agent for associated companies

Ratio Decidendi

There was credible evidence that the Plaintiff lacked substantial assets beyond its $10,000 paid up capital, had directors/shareholders resident abroad, and no evidence that controllers would fund any costs order; given that and the limited strength of the Defendant's defence, the exercise of discretion to order security was justified and the Master's order for $400,000 security was upheld.

Court Disposition

Appeal dismissed

Orders

  • Appeal dismissed with costs
  • Plaintiff to furnish security for costs in the sum of 400000 HKD within 28 days from the date of this order