JADE PLAN ASSETS LTD AND OTHERS v. LAU KIM HUNG JACK AND OTHERS

JADE PLAN ASSETS LTD AND OTHERS v. LAU KIM HUNG JACK AND OTHERS

On the available evidence the 2nd Plaintiff is a company resident outside Hong Kong (registered in BVI, no local assets, no evidence of central management in Hong Kong), but the court exercised its discretion to refuse security for costs because the 2nd Plaintiff sued with a co-plaintiff resident in Hong Kong who had the capacity to meet any costs order and because the two plaintiffs acted in the same capacity and factual circumstances reducing risk to the defendant's costs recovery.

Citation
JADE PLAN ASSETS LTD AND OTHERS v. LAU KIM HUNG JACK AND OTHERS
Parties
1st Plaintiff: JADE PLAN ASSETS LIMITED; 2nd Plaintiff: RONDEN INTERNATIONAL LIMITED; 3rd Plaintiff: CHEUNG YU TONG TONY; 1st Defendant: LAU KIM HUNG JACK; 2nd Defendant: NEW HORIZON ASSOCIATES LIMITED; 3rd Defendant: STAR CHOICE INVESTMENT LIMITED
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
9 January 2008
Case Number
HCA910/2007
Procedural Posture
Civil Proceeding Concerning Fiduciary Duties, Trust/accounting and Interlocutory Security for Costs / Interlocutory Application (security for Costs)
Outcome
Application for security for costs refused; costs order nisi granted in favour of the 2nd Plaintiff in respect of the application
Legal Topics
Security for Costs, Company Residence and Central Management, Quistclose Trust, Duty to Account, Agent for Disclosed Principal
Source Language
EN
Civil Procedure Company Law Trusts and Equity Fiduciary Duty Agency Security for Costs Company Residence and Central Management Quistclose Trust +2 more

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Parties

JADE PLAN ASSETS LIMITED

1st Plaintiff

RONDEN INTERNATIONAL LIMITED

2nd Plaintiff

CHEUNG YU TONG TONY

3rd Plaintiff

LAU KIM HUNG JACK

1st Defendant

NEW HORIZON ASSOCIATES LIMITED

2nd Defendant

STAR CHOICE INVESTMENT LIMITED

3rd Defendant

Procedural Posture

Civil Proceeding Concerning Fiduciary Duties, Trust/accounting and Interlocutory Security for Costs / Interlocutory Application (security for Costs)

Legal Issues

  1. 1 Whether the 2nd Plaintiff is resident outside Hong Kong for security for costs purposes
  2. 2 Whether the 1st Defendant can be liable personally given claimed agency for a disclosed principal
  3. 3 Whether a Quistclose trust arises in respect of the syndicated loan

Ratio Decidendi

On the available evidence the 2nd Plaintiff is a company resident outside Hong Kong (registered in BVI, no local assets, no evidence of central management in Hong Kong), but the court exercised its discretion to refuse security for costs because the 2nd Plaintiff sued with a co-plaintiff resident in Hong Kong who had the capacity to meet any costs order and because the two plaintiffs acted in the same capacity and factual circumstances reducing risk to the defendant's costs recovery.

Court Disposition

Application for security for costs refused; costs order nisi granted in favour of the 2nd Plaintiff in respect of the application

Orders

  • The 1st Defendant's application for security for costs against the 2nd Plaintiff is refused
  • Costs order nisi granted in favour of the 2nd Plaintiff in respect of this application