VIGERS HONG KONG LTD v. JUNSA DEVELOPMENT LTD

VIGERS HONG KONG LTD v. JUNSA DEVELOPMENT LTD

The prerequisite under s.357 was satisfied because Junsa was an impecunious shell company with negligible assets and no business; the court properly exercised its discretion to order security because there was no evidence Junsa could raise the required funds from other shareholders or backers and its impecuniosity was not caused by the defendants; orders made by the Master (Appearance HK$850,000; Vigers and Mr Fong HK$1,000,000; K.B. Chau & Co. HK$700,000, up to and including trial) were reasonable and were affirmed; the appeals were dismissed and costs of the appeals were ordered payable to respondents.

Citation
VIGERS HONG KONG LTD v. JUNSA DEVELOPMENT LTD
Parties
Plaintiff (hca5173/1998); 2nd Defendant (hca9036/1998) and Third Party: Vigers Hong Kong Limited; Defendant (hca5173/1998); Plaintiff (hca9036/1998 & Hca4486/2001): Junsa Development Limited; 1st Defendant (hca9036/1998): Appearance Estate Limited; 3rd Defendant (hca9036/1998): Fong Tse Kin; Defendant (hca4486/2001) and Third Party: K.B. Chau & Co. (a firm)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
28 April 2003
Case Number
HCA5173/1998
Procedural Posture
Consolidated Civil Actions Arising From Tenancy/agency/misrepresentation and Professional Negligence; Application Under Companies Ordinance S.357 for Security for Costs / Appeal From Master's Order for Security for Costs; Heard in Chambers Before Deputy High Court Judge (final Decision on Security for Costs and Costs of Appeal)
Outcome
Appeals dismissed; Master's orders for security for costs affirmed
Legal Topics
Security for Costs, Misrepresentation, Professional Negligence, Stay of Proceedings, Ability of Company to Pay Costs
Source Language
EN
Company Law Civil Procedure Contract Law Tort (negligence) Property/planning Law Security for Costs Misrepresentation Professional Negligence +2 more

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Parties

Vigers Hong Kong Limited

Plaintiff (hca5173/1998); 2nd Defendant (hca9036/1998) and Third Party

Junsa Development Limited

Defendant (hca5173/1998); Plaintiff (hca9036/1998 & Hca4486/2001)

Appearance Estate Limited

1st Defendant (hca9036/1998)

Fong Tse Kin

3rd Defendant (hca9036/1998)

K.B. Chau & Co. (a firm)

Defendant (hca4486/2001) and Third Party

Procedural Posture

Consolidated Civil Actions Arising From Tenancy/agency/misrepresentation and Professional Negligence; Application Under Companies Ordinance S.357 for Security for Costs / Appeal From Master's Order for Security for Costs; Heard in Chambers Before Deputy High Court Judge (final Decision on Security for Costs and Costs of Appeal)

Legal Issues

  1. 1 Whether section 357 Companies Ordinance prerequisite (reason to believe plaintiff company will be unable to pay defendant's costs) was satisfied
  2. 2 Whether the court should exercise its discretion to order security for costs and in what quantum
  3. 3 Whether the security order would stifle a bona fide claim and whether impecuniosity was caused by defendants

Ratio Decidendi

The prerequisite under s.357 was satisfied because Junsa was an impecunious shell company with negligible assets and no business; the court properly exercised its discretion to order security because there was no evidence Junsa could raise the required funds from other shareholders or backers and its impecuniosity was not caused by the defendants; orders made by the Master (Appearance HK$850,000; Vigers and Mr Fong HK$1,000,000; K.B. Chau & Co. HK$700,000, up to and including trial) were reasonable and were affirmed; the appeals were dismissed and costs of the appeals were ordered payable to respondents.

Court Disposition

Appeals dismissed; Master's orders for security for costs affirmed

Orders

  • Junsa Development Limited ordered to provide security for costs up to and including trial in the sums ordered by Master Woolley: Appearance Estate Limited HK$850000
  • Junsa Development Limited ordered to provide security for costs up to and including trial: Vigers Hong Kong Limited and Mr Fong Tse Kin HK$1000000