FONG TAK SHING v. GREENSWARD CO LTD AND ANOTHER

FONG TAK SHING v. GREENSWARD CO LTD AND ANOTHER

Although Fong is a nominal petitioner (holding his share on trust), the petition and Greensward's cross-petition are so closely bound and largely overlapping that the petition is in substance a defence to the cross-petition; therefore the ordinary rule against requiring security from a party defending by counterclaim applies, no exceptional circumstances were shown, and an order for security for costs would be unjust and effectively meaningless; summons dismissed and costs of the application awarded to Fong.

Citation
FONG TAK SHING v. GREENSWARD CO LTD AND ANOTHER
Parties
Petitioner: Fong Tak Shing; 1st Respondent: Greensward Company Limited; 2nd Respondent: Worldwide International Enterprises Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
12 May 2004
Case Number
HCCW162/2004
Procedural Posture
Companies (winding Up) Petition Under Companies Ordinance Sections 177(1)(f) and 168 a / Interlocutory Application for Security for Costs (directions Hearing)
Outcome
Summons by Greensward for security for costs dismissed
Legal Topics
Winding Up, Unfairly Prejudicial Conduct (section 168 A), Security for Costs, Nominal Petitioner, Just and Equitable Winding Up
Source Language
EN
Company Law Civil Procedure Costs Law Winding Up Unfairly Prejudicial Conduct (section 168 A) Security for Costs Nominal Petitioner Just and Equitable Winding Up

Case Brief

Summary, issues, holding and outcome

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Parties

Fong Tak Shing

Petitioner

Greensward Company Limited

1st Respondent

Worldwide International Enterprises Limited

2nd Respondent

Procedural Posture

Companies (winding Up) Petition Under Companies Ordinance Sections 177(1)(f) and 168 a / Interlocutory Application for Security for Costs (directions Hearing)

Legal Issues

  1. 1 Whether the petitioner is a nominal petitioner for the purpose of security for costs
  2. 2 Whether there is reason to believe the petitioner will be unable to pay the respondent's costs
  3. 3 Whether the court should exercise its discretion to order security for costs given the overlap with the cross-petition

Ratio Decidendi

Although Fong is a nominal petitioner (holding his share on trust), the petition and Greensward's cross-petition are so closely bound and largely overlapping that the petition is in substance a defence to the cross-petition; therefore the ordinary rule against requiring security from a party defending by counterclaim applies, no exceptional circumstances were shown, and an order for security for costs would be unjust and effectively meaningless; summons dismissed and costs of the application awarded to Fong.

Court Disposition

Summons by Greensward for security for costs dismissed

Orders

  • Summons for security for costs dismissed
  • Costs of the petitioner in this application to be paid by Greensward Company Limited