BUILD FAME SERVICES LTD v. YAU LEE CONSTRUCTION CO LTD

BUILD FAME SERVICES LTD v. YAU LEE CONSTRUCTION CO LTD

Security for costs of HK$1,500,000 was ordered because there was reason to believe Build Fame would be unable to meet Yau Lee's costs, there was no supporting evidence from the BVI parent, and the court was not satisfied that an order would stifle the action; the application was not unduly delayed and the court exercised its discretion to reduce the amount claimed.

Citation
BUILD FAME SERVICES LTD v. YAU LEE CONSTRUCTION CO LTD
Parties
Plaintiff (original Action); 1st Defendant (counterclaim): Build Fame Services Ltd.; Defendant (original Action); Plaintiff (counterclaim): Yau Lee Construction Co. Ltd.; 2nd Defendant (counterclaim); Director of Build Fame: Wong Kin Yee
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
21 June 2010
Case Number
HCCT59/2007
Procedural Posture
Construction and Arbitration Proceedings; Subcontract Dispute / Interlocutory Hearing: Application for Security for Costs
Outcome
Security for costs ordered
Legal Topics
Security for Costs, Subcontract Breaches, Counterclaim, Winding Up Petition, Parent Company Undertakings, Representation
Source Language
EN
Construction Law Company Law Civil Procedure Costs Insolvency Security for Costs Subcontract Breaches Counterclaim +3 more

Case Brief

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Parties

Build Fame Services Ltd.

Plaintiff (original Action); 1st Defendant (counterclaim)

Yau Lee Construction Co. Ltd.

Defendant (original Action); Plaintiff (counterclaim)

Wong Kin Yee

2nd Defendant (counterclaim); Director of Build Fame

Procedural Posture

Construction and Arbitration Proceedings; Subcontract Dispute / Interlocutory Hearing: Application for Security for Costs

Legal Issues

  1. 1 Whether to order security for costs under s357 Companies Ordinance
  2. 2 Whether Build Fame is likely unable to pay Yau Lee's costs
  3. 3 Whether an order for security would stifle the plaintiff's action

Ratio Decidendi

Security for costs of HK$1,500,000 was ordered because there was reason to believe Build Fame would be unable to meet Yau Lee's costs, there was no supporting evidence from the BVI parent, and the court was not satisfied that an order would stifle the action; the application was not unduly delayed and the court exercised its discretion to reduce the amount claimed.

Court Disposition

Security for costs ordered

Orders

  • Build Fame Services Ltd. to pay security for costs of HK$1,500,000 within 28 days of the order
  • Failing payment within 28 days, the action by Build Fame will be stayed