HEBEI ENTERPRISES LTD AND ANOTHER v. LIVASIRI & CO (a firm) AND ANOTHER

HEBEI ENTERPRISES LTD AND ANOTHER v. LIVASIRI & CO (a firm) AND ANOTHER

On the evidence (qualified audited reports, absence of up-to-date management accounts, and the relevant property being held by a subsidiary), the court was satisfied on balance that there was reason to believe the plaintiffs themselves would be unable to pay Mr Emerson's costs and exercised its discretion to order security; the appropriate quantum after deductions was fixed at HK$792,607 to be paid into court within 21 days, failing which proceedings against Mr Emerson are stayed.

Citation
HEBEI ENTERPRISES LTD AND ANOTHER v. LIVASIRI & CO (a firm) AND ANOTHER
Parties
1st Plaintiff: Hebei Enterprises Limited; 2nd Plaintiff: Hebei Investment Limited; 1st Defendant: Livasiri & Co. (a firm); 2nd Defendant: Ho & Chan (a firm) (in dissolution)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
14 November 2006
Case Number
HCA2967/2002
Procedural Posture
Civil Professional Negligence / Conveyancing / Application for Security for Costs; Discovery Stage
Outcome
Security for costs ordered in favour of Mr Emerson; plaintiffs required to provide security or face stay of proceedings; costs of the application awarded to Mr Emerson
Legal Topics
Security for Costs, S.357 Companies Ordinance, Separate Legal Entity, Audited Accounts and Qualifications, Quantification of Security
Source Language
EN
Company Law Civil Procedure Costs Professional Negligence Conveyancing Security for Costs S.357 Companies Ordinance Separate Legal Entity +2 more

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Parties

Hebei Enterprises Limited

1st Plaintiff

Hebei Investment Limited

2nd Plaintiff

Livasiri & Co. (a firm)

1st Defendant

Ho & Chan (a firm) (in dissolution)

2nd Defendant

Procedural Posture

Civil Professional Negligence / Conveyancing / Application for Security for Costs; Discovery Stage

Legal Issues

  1. 1 Whether plaintiffs will be unable to pay defendant's costs if defendant succeeds
  2. 2 Whether discretion should be exercised to order security for costs under s.357 CO and inherent jurisdiction
  3. 3 Proper quantum of security

Ratio Decidendi

On the evidence (qualified audited reports, absence of up-to-date management accounts, and the relevant property being held by a subsidiary), the court was satisfied on balance that there was reason to believe the plaintiffs themselves would be unable to pay Mr Emerson's costs and exercised its discretion to order security; the appropriate quantum after deductions was fixed at HK$792,607 to be paid into court within 21 days, failing which proceedings against Mr Emerson are stayed.

Court Disposition

Security for costs ordered in favour of Mr Emerson; plaintiffs required to provide security or face stay of proceedings; costs of the application awarded to Mr Emerson

Orders

  • Plaintiffs to provide security for Mr Emerson by payment into court of HK$792,607 within 21 days, failing which all further proceedings against Mr Emerson will be stayed.
  • Liberty to apply for further directions and further security of costs.