JUNSA DEVELOPMENT LTD v. APPEARANCE ESTATE LTD AND OTHERS

JUNSA DEVELOPMENT LTD v. APPEARANCE ESTATE LTD AND OTHERS

The prerequisite under s.357 was satisfied because Junsa is an impecunious shell company with no assets; there was no clear high probability of success to preclude ordering security; Junsa's inability to provide funds resulted from shareholder unwillingness and the principal's financial state not from defendants' alleged past misconduct; unwillingness of backers is not a valid ground to resist security; third party defendants are entitled to apply for security in respect of their independent liabilities; accordingly the master's orders for security (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 upheld and the appeals...

Citation
JUNSA DEVELOPMENT LTD v. APPEARANCE ESTATE LTD AND OTHERS
Parties
Plaintiff (hca5173) and 2nd Defendant (hca9036): Vigers Hong Kong Limited; Defendant (hca5173) and Plaintiff (hca9036 & Hca4486): Junsa Development Limited; 1st Defendant (hca9036): Appearance Estate Limited; 3rd Defendant (hca9036): Fong Tse Kin; Defendant (hca4486) and Third Party (hca9036): K.B. Chau & Co. (a firm)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
28 April 2003
Case Number
HCA9036/1998
Procedural Posture
Consolidated Civil Actions (contract, Misrepresentation, Negligence) / Appeal From Master Woolley Order for Security for Costs; Hearing in Chambers Before Deputy High Court Judge (decision on Appeal)
Outcome
Appeals dismissed; order for security for costs by Master Woolley upheld.
Legal Topics
Security for Costs, Misrepresentation, Negligence, Agency Commission, Rescission, Companies Ordinance S.357
Source Language
EN
Company Law Civil Procedure Contract Law Tort (negligence) Real Property Security for Costs Misrepresentation Negligence +3 more

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Parties

Vigers Hong Kong Limited

Plaintiff (hca5173) and 2nd Defendant (hca9036)

Junsa Development Limited

Defendant (hca5173) and Plaintiff (hca9036 & Hca4486)

Appearance Estate Limited

1st Defendant (hca9036)

Fong Tse Kin

3rd Defendant (hca9036)

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

Defendant (hca4486) and Third Party (hca9036)

Procedural Posture

Consolidated Civil Actions (contract, Misrepresentation, Negligence) / Appeal From Master Woolley Order for Security for Costs; Hearing in Chambers Before Deputy High Court Judge (decision on Appeal)

Legal Issues

  1. 1 Whether s.357 Companies Ordinance prerequisite satisfied (company unable to pay defendant's costs)
  2. 2 Whether the court should exercise its discretion to order security for costs
  3. 3 Whether the security orders would stifle a bona fide claim

Ratio Decidendi

The prerequisite under s.357 was satisfied because Junsa is an impecunious shell company with no assets; there was no clear high probability of success to preclude ordering security; Junsa's inability to provide funds resulted from shareholder unwillingness and the principal's financial state not from defendants' alleged past misconduct; unwillingness of backers is not a valid ground to resist security; third party defendants are entitled to apply for security in respect of their independent liabilities; accordingly the master's orders for security (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 upheld and the appeals...

Court Disposition

Appeals dismissed; order for security for costs by Master Woolley upheld.

Orders

  • Junsa Development Limited to provide security for costs to Appearance Estate Limited in the sum of HK$850,000 up to and including trial.
  • Junsa Development Limited to provide security for costs to Vigers Hong Kong Limited and Mr Fong Tse Kin in the sum of HK$1,000,000 up to and including trial.