HONG KONG TOY CENTRE LTD. AND ANOTHER v. CHAN KAN KWONG MARGARET AND OTHERS

HONG KONG TOY CENTRE LTD. AND ANOTHER v. CHAN KAN KWONG MARGARET AND OTHERS

Credible evidence (paid up capital, HKTCIL group's substantial 1998 loss, admitted unpaid wages at a subsidiary, and defendants' incurred and projected costs) gave reason to believe plaintiffs might be unable to pay defendants' costs; balancing the bona fides of the claim and group backing, the court exercised its discretion to order security of HK$2,000,000 to be provided within 21 days and ordered a conditional stay if not complied with; costs of the application ordered nisi to be defendants' costs in the cause.

Citation
HONG KONG TOY CENTRE LTD. AND ANOTHER v. CHAN KAN KWONG MARGARET AND OTHERS
Parties
1st Plaintiff: HONG KONG TOY CENTRE LIMITED; 2nd Plaintiff: DARBRO INTERNATIONAL LIMITED; 1st Defendant: CHAN KAN KWONG MARGARET; 2nd Defendant: FORTUNE WIN TRADING LIMITED; 3rd Defendant: MONG SIU LING; 4th Defendant: W. GREAT WORTH INTERNATIONAL LIMITED
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
5 May 1999
Case Number
HCA9971/1998
Procedural Posture
Application for Security for Costs Under Companies Ordinance S.357 / Interlocutory Pre Trial Application (trial Listed 1 June 1999)
Outcome
Security for costs ordered; conditional stay of plaintiffs' claim if security not provided
Legal Topics
Security for Costs, Ability to Pay, Credibility of Evidence, Interim Injunctions
Source Language
EN
Company Law Civil Procedure Costs Security for Costs Ability to Pay Credibility of Evidence Interim Injunctions

Case Brief

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Parties

HONG KONG TOY CENTRE LIMITED

1st Plaintiff

DARBRO INTERNATIONAL LIMITED

2nd Plaintiff

CHAN KAN KWONG MARGARET

1st Defendant

FORTUNE WIN TRADING LIMITED

2nd Defendant

MONG SIU LING

3rd Defendant

W. GREAT WORTH INTERNATIONAL LIMITED

4th Defendant

Procedural Posture

Application for Security for Costs Under Companies Ordinance S.357 / Interlocutory Pre Trial Application (trial Listed 1 June 1999)

Legal Issues

  1. 1 Whether there is reason to believe the plaintiffs would be unable to pay the defendants' costs if unsuccessful
  2. 2 Whether the court should exercise its discretion to order security for costs and the appropriate amount
  3. 3 Whether the evidence relied upon by defendants (unnamed sources and hearsay) is credible

Ratio Decidendi

Credible evidence (paid up capital, HKTCIL group's substantial 1998 loss, admitted unpaid wages at a subsidiary, and defendants' incurred and projected costs) gave reason to believe plaintiffs might be unable to pay defendants' costs; balancing the bona fides of the claim and group backing, the court exercised its discretion to order security of HK$2,000,000 to be provided within 21 days and ordered a conditional stay if not complied with; costs of the application ordered nisi to be defendants' costs in the cause.

Court Disposition

Security for costs ordered; conditional stay of plaintiffs' claim if security not provided

Orders

  • Plaintiffs to provide security for costs in the amount of HK$2,000,000 within 21 days
  • Security may be by cash deposit or bank guarantee