SHANGHAI COMMERCIAL BANK LTD v. CHANG YUAN TA GRANT AND ANOTHER

SHANGHAI COMMERCIAL BANK LTD v. CHANG YUAN TA GRANT AND ANOTHER

Security for costs was ordered because the plaintiffs (Clark/CH/KD Chang) were ordinarily resident outside Hong Kong, KD Chang was a nominal plaintiff as to BEA, the counterclaims (notably CH Chang's counterclaim in HCA805 and claims in HCA1996) were in substance independent cross-actions rather than mere defences, the Changs failed to provide satisfactory evidence that they could not provide security or that an order would stifle their claims, and enforcement issues concerning alleged US pension funds did not rebut the justness of ordering security; quantum was set having regard to complexity and likely costs.

Citation
SHANGHAI COMMERCIAL BANK LTD v. CHANG YUAN TA GRANT AND ANOTHER
Parties
Plaintiff (hca805); 1st Defendant (hca1996): Shanghai Commercial Bank Limited; 2nd Defendant (hca1996); 2nd Defendant (by Counterclaim) (hca805): The Bank of East Asia, Limited; 1st Defendant (hca805); 1st Plaintiff (counterclaim): Chang Yuan Ta Grant; 2nd Defendant (hca805); 2nd Plaintiff (counterclaim): Chang Ching Ho; 1st Plaintiff (hca1996): Zhang Zhatzewal (also known as Chang Chih Hwa, Clark); 2nd Plaintiff (hca1996): Chang Kung Da (KD Chang)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
17 May 2011
Case Number
HCA805/2009
Procedural Posture
Interlocutory Applications for Security for Costs in Civil Actions (high Court, Court of First Instance) / Chambers Hearing of Security for Costs Applications After Exchange of Witness Statements and Prior to Case Management Conference
Outcome
Applications for security for costs granted in part.
Legal Topics
Security for Costs, Counterclaim Vs Defence, Jurisdictional Residence, Enforcement of Costs Orders, Staying Proceedings, Assessment of Quantum for Security
Source Language
EN
Civil Procedure Banking Law Tort (negligence, Misrepresentation) Conflict of Laws/enforcement Security for Costs Counterclaim Vs Defence Jurisdictional Residence Enforcement of Costs Orders +2 more

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Parties

Shanghai Commercial Bank Limited

Plaintiff (hca805); 1st Defendant (hca1996)

The Bank of East Asia, Limited

2nd Defendant (hca1996); 2nd Defendant (by Counterclaim) (hca805)

Chang Yuan Ta Grant

1st Defendant (hca805); 1st Plaintiff (counterclaim)

Chang Ching Ho

2nd Defendant (hca805); 2nd Plaintiff (counterclaim)

Zhang Zhatzewal (also known as Chang Chih Hwa, Clark)

1st Plaintiff (hca1996)

Chang Kung Da (KD Chang)

2nd Plaintiff (hca1996)

Procedural Posture

Interlocutory Applications for Security for Costs in Civil Actions (high Court, Court of First Instance) / Chambers Hearing of Security for Costs Applications After Exchange of Witness Statements and Prior to Case Management Conference

Legal Issues

  1. 1 Whether overseas plaintiffs should be ordered to provide security for costs under Order 23 r.1(1)
  2. 2 Whether a counterclaim is in substance a defence or an independent cross-action
  3. 3 Whether an order for security would stifle the plaintiffs' claims due to inability to pay

Ratio Decidendi

Security for costs was ordered because the plaintiffs (Clark/CH/KD Chang) were ordinarily resident outside Hong Kong, KD Chang was a nominal plaintiff as to BEA, the counterclaims (notably CH Chang's counterclaim in HCA805 and claims in HCA1996) were in substance independent cross-actions rather than mere defences, the Changs failed to provide satisfactory evidence that they could not provide security or that an order would stifle their claims, and enforcement issues concerning alleged US pension funds did not rebut the justness of ordering security; quantum was set having regard to complexity and likely costs.

Court Disposition

Applications for security for costs granted in part.

Orders

  • In HCA805/2009 CH Chang to provide security of HK$3000000 for The Bank of East Asia's costs by payment into court on or before 31 May 2011; further proceedings by counterclaim against BEA stayed until security given; liberty to apply.
  • In HCA1996/2009 Clark Chang and KD Chang to provide security of HK$3500000 for The Bank of East Asia's costs by payment into court on or before 31 May 2011; further proceedings against BEA stayed until security given; liberty to apply.