POLYLINE DEVELOPMENT LTD (in liquidation) v. CHING LIN CHUEN AND OTHERS

POLYLINE DEVELOPMENT LTD (in liquidation) v. CHING LIN CHUEN AND OTHERS

s.905 Companies Ordinance was engaged because the plaintiff in liquidation and its third party funder would not meet adverse costs; the court should exercise its discretion to order security because the merits were not so strong as to preclude an order and ordering security would not unreasonably stifle the action; on a broad‑brush assessment the just sum to secure defendants' costs to discovery was HK$2.8 million; proceedings stayed until payment and dismissal ordered on default.

Citation
[2023] HKCFI 3049
Parties
Plaintiff: Polyline Development Limited; 1st Defendant: Ching Lin Chuen; 2nd Defendant: Personal Representative of the late Tam Shui; 3rd Defendant: Chan Yung Yu Jacky; 4th Defendant: Cheng Yee Cheong; 5th Defendant: Chan Yung Heng Henry; 6th Defendant: Han Xiu Yan; 7th Defendant: Chan King; 8th Defendant: Ching Ka Hung; 9th Defendant: Cheung Hing Loi; 10th Defendant: Cheung Bik Fong; 11th Defendant: Lo Sam Shing; 12th Defendant: Polyline International Group Limited; 13th Defendant: Gainable International Limited; 14th Defendant: Bondfield Development Limited; 15th Defendant: Sunfair Corporation Limited; 16th Defendant: Chings Enterprises Limited; 17th Defendant: Grand Luck Limited; 18th Defendant: Hong Kong Weidong Real Estate Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
28 November 2023
Case Number
HCA2319/2019
Procedural Posture
Companies Ordinance S.905 Security for Costs Application / Interlocutory — Security for Costs Hearing (pre Discovery)
Outcome
Security for costs ordered pursuant to s.905 Companies Ordinance
Legal Topics
Security for Costs, Fiduciary Duties, Fraudulent Transfer, Third Party Litigation Funding, Limitation, Striking Out
Source Language
EN
Company Law Civil Procedure Insolvency Costs Law Equity and Trusts Security for Costs Fiduciary Duties Fraudulent Transfer +3 more

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Parties

Polyline Development Limited

Plaintiff

Ching Lin Chuen

1st Defendant

Personal Representative of the late Tam Shui

2nd Defendant

Chan Yung Yu Jacky

3rd Defendant

Cheng Yee Cheong

4th Defendant

Chan Yung Heng Henry

5th Defendant

Han Xiu Yan

6th Defendant

Chan King

7th Defendant

Ching Ka Hung

8th Defendant

Cheung Hing Loi

9th Defendant

Cheung Bik Fong

10th Defendant

Lo Sam Shing

11th Defendant

Polyline International Group Limited

12th Defendant

Gainable International Limited

13th Defendant

Bondfield Development Limited

14th Defendant

Sunfair Corporation Limited

15th Defendant

Chings Enterprises Limited

16th Defendant

Grand Luck Limited

17th Defendant

Hong Kong Weidong Real Estate Limited

18th Defendant

Procedural Posture

Companies Ordinance S.905 Security for Costs Application / Interlocutory — Security for Costs Hearing (pre Discovery)

Legal Issues

  1. 1 Whether s.905 Companies Ordinance applies and security should be ordered
  2. 2 Whether the Plaintiff's impecuniosity is caused by the Defendants' alleged wrongdoing
  3. 3 Whether the merits of the Plaintiff's case are so strong as to defeat an order for security

Ratio Decidendi

s.905 Companies Ordinance was engaged because the plaintiff in liquidation and its third party funder would not meet adverse costs; the court should exercise its discretion to order security because the merits were not so strong as to preclude an order and ordering security would not unreasonably stifle the action; on a broad‑brush assessment the just sum to secure defendants' costs to discovery was HK$2.8 million; proceedings stayed until payment and dismissal ordered on default.

Court Disposition

Security for costs ordered pursuant to s.905 Companies Ordinance

Orders

  • Plaintiff to provide security of HK$2,800,000 for Applicant defendants' costs up to discovery by payment into court within 28 days or such extended period agreed by parties
  • All proceedings stayed pending provision of the security