MELVIN WAXMAN v. LI FEI YU AND OTHERS

MELVIN WAXMAN v. LI FEI YU AND OTHERS

Application for security for costs was refused. The master accepted that defendants marginally established residence outside Hong Kong but found their application was brought late without satisfactory explanation and, critically, the plaintiff holds substantial assets within the jurisdiction (notably a valuable 30% shareholding yielding significant dividends) such that there was no real risk defendants could not recover costs; having regard to all circumstances it was not just to order security under O23 r1.

Citation
MELVIN WAXMAN v. LI FEI YU AND OTHERS
Parties
Plaintiff (derivative): Melvin Waxman; 1st Defendant: Li Fei Yu; 2nd Defendant: Solut (Hong Kong) Company Limited; 3rd Defendant: ROI Logistics International Limited; 4th Defendant: Seiryu (Hong Kong) Investment Company Limited; 5th Defendant: Axent Corporation Limited; 6th Defendant: Swell International Trading Company Limited; 7th Defendant: Top China Corporation Limited; 8th Defendant: B & R International (Hong Kong) Limited; 9th Defendant (company): WDI International (HK) Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
20 March 2015
Case Number
HCA1973/2012
Procedural Posture
Derivative Action Concerning Alleged Misappropriation and Interlocutory Application for Security for Costs / Interlocutory – Security for Costs Application Heard by Master K Lo
Outcome
Application for security for costs refused
Legal Topics
Security for Costs, Derivative Action, Ordinary Residence, Delay in Interlocutory Applications, Assets Within Jurisdiction, Discovery
Source Language
EN
Company Law Civil Procedure Costs Security for Costs Derivative Action Ordinary Residence Delay in Interlocutory Applications Assets Within Jurisdiction +1 more

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Parties

Melvin Waxman

Plaintiff (derivative)

Li Fei Yu

1st Defendant

Solut (Hong Kong) Company Limited

2nd Defendant

ROI Logistics International Limited

3rd Defendant

Seiryu (Hong Kong) Investment Company Limited

4th Defendant

Axent Corporation Limited

5th Defendant

Swell International Trading Company Limited

6th Defendant

Top China Corporation Limited

7th Defendant

B & R International (Hong Kong) Limited

8th Defendant

WDI International (HK) Limited

9th Defendant (company)

Procedural Posture

Derivative Action Concerning Alleged Misappropriation and Interlocutory Application for Security for Costs / Interlocutory – Security for Costs Application Heard by Master K Lo

Legal Issues

  1. 1 Whether the plaintiff is ordinarily resident outside Hong Kong for purposes of O23 r1
  2. 2 Whether the defendants' application for security for costs was unduly delayed
  3. 3 Whether the plaintiff has substantial assets within the jurisdiction making security unnecessary

Ratio Decidendi

Application for security for costs was refused. The master accepted that defendants marginally established residence outside Hong Kong but found their application was brought late without satisfactory explanation and, critically, the plaintiff holds substantial assets within the jurisdiction (notably a valuable 30% shareholding yielding significant dividends) such that there was no real risk defendants could not recover costs; having regard to all circumstances it was not just to order security under O23 r1.

Court Disposition

Application for security for costs refused

Orders

  • Defendants to pay plaintiff costs of the application with certificate for counsel to be summarily assessed and paid forthwith
  • Solicitors for the plaintiff to lodge with the court and serve on the corporate defendants the Statement of Costs within 14 days