VELATEL GLOBAL COMMUNICATIONS INC AND ANOTHER v. CHINACOMM LTD AND OTHERS

VELATEL GLOBAL COMMUNICATIONS INC AND ANOTHER v. CHINACOMM LTD AND OTHERS

The court dismissed the defendants' appeal and refused to order security for costs because, in the exercise of its broad discretion, the defendants' conduct (including findings of dissipation in earlier judgment, tactical withdrawal of the Counterclaim to bolster the security application, and a failure to prosecute or promptly abandon an appeal) demonstrated the application was tactical and not a genuine protective need; there was no clear basis on the merits to outweigh those factors and the pending/previous appeal further militated against ordering security.

Citation
VELATEL GLOBAL COMMUNICATIONS INC AND ANOTHER v. CHINACOMM LTD AND OTHERS
Parties
1st Plaintiff: VELATEL GLOBAL COMMUNICATIONS INC; 2nd Plaintiff: TRUSSNET CAPITAL PARTNERS (HK)LTD; 1st Defendant: CHINACOMM LIMITED; 2nd Defendant: THRIVE CENTURY INTERNATIONAL LIMITED; 3rd Defendant: NEWTOP HOLDINGS LIMITED; 4th Defendant: SMART CHANNEL DEVELOPMENT LIMITED; 5th Defendant: MONG SIN（孟倩）; 6th Defendant: QIU PING（邱平）; 7th Defendant: YUAN YI（袁毅）; 8th Defendant: CECT CHINACOMM COMMUNICATIONS CO LTD（中電華通通信有限公司）; 9th Defendant: CECT CHINACOMM SHANGHAI CO LTD（中電華通上海通信有限公司）; 10th Defendant: FENG XIAO MING（馮曉鳴）
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
7 August 2014
Case Number
HCA1978/2011
Procedural Posture
Security for Costs / Mareva Injunctive Proceedings Arising From Commercial Joint Venture Dispute / Appeal From Master's Dismissal of Defendants' Application for Security for Costs Before the Court of First Instance
Outcome
Defendants' appeal dismissed; no security for costs ordered
Legal Topics
Security for Costs, Mareva Injunction, Costs Orders, Appeal, Dissipation
Source Language
EN
Civil Procedure Company Law Equity Commercial Law Security for Costs Mareva Injunction Costs Orders Appeal +1 more

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Parties

VELATEL GLOBAL COMMUNICATIONS INC

1st Plaintiff

TRUSSNET CAPITAL PARTNERS (HK)LTD

2nd Plaintiff

CHINACOMM LIMITED

1st Defendant

THRIVE CENTURY INTERNATIONAL LIMITED

2nd Defendant

NEWTOP HOLDINGS LIMITED

3rd Defendant

SMART CHANNEL DEVELOPMENT LIMITED

4th Defendant

MONG SIN（孟倩）

5th Defendant

QIU PING（邱平）

6th Defendant

YUAN YI（袁毅）

7th Defendant

CECT CHINACOMM COMMUNICATIONS CO LTD（中電華通通信有限公司）

8th Defendant

CECT CHINACOMM SHANGHAI CO LTD（中電華通上海通信有限公司）

9th Defendant

FENG XIAO MING（馮曉鳴）

10th Defendant

Procedural Posture

Security for Costs / Mareva Injunctive Proceedings Arising From Commercial Joint Venture Dispute / Appeal From Master's Dismissal of Defendants' Application for Security for Costs Before the Court of First Instance

Legal Issues

  1. 1 Whether the plaintiffs (foreign/resident out of jurisdiction) should be ordered to provide security for costs under Order 23 r1 or s905 Companies Ordinance
  2. 2 Whether the defendants' conduct (alleged dissipation, tactical withdrawal of counterclaim, failure to prosecute appeal) disentitles them to an order for security for costs
  3. 3 Proper weight to give to merits at the security for costs stage and whether a mini-trial is required

Ratio Decidendi

The court dismissed the defendants' appeal and refused to order security for costs because, in the exercise of its broad discretion, the defendants' conduct (including findings of dissipation in earlier judgment, tactical withdrawal of the Counterclaim to bolster the security application, and a failure to prosecute or promptly abandon an appeal) demonstrated the application was tactical and not a genuine protective need; there was no clear basis on the merits to outweigh those factors and the pending/previous appeal further militated against ordering security.

Court Disposition

Defendants' appeal dismissed; no security for costs ordered

Orders

  • The defendants\' appeal dated 11 June 2014 is dismissed
  • No order that the plaintiffs provide security for costs