Hong Kong Case Law: Decisions & Judgments

Topic

Companies ordinance s.357

Legal area

Court

11 Dec 2013

MAJOR VANTAGE LTD v. WALLEM SHIPPING (HONG KONG) LTD AND ANOTHER

Citation

MAJOR VANTAGE LTD v. WALLEM SHIPPING (HONG KONG) LTD AND ANOTHER
Court

Court of First Instance
Case number

HCCL5/2013

The threshold under s.357 was established because the plaintiff is a shelf company with minimal paid up capital, no evident Hong Kong business or proper office, and its apparent sole Hong Kong asset (a bank deposit) is not reliably available to meet costs; exercising the court's discretion and balancing the interests, sufficient security of HK$500,000 up to the first CMC was ordered and proceedings stayed until provided.
27 Sept 2013

SNE ENGINEERING CO. LTD v. CHIM KEE MACHINERY CO. LTD

Citation

SNE ENGINEERING CO. LTD v. CHIM KEE MACHINERY CO. LTD
Court

Court of First Instance
Case number

HCA2025/2012

Although the defendant adduced credible evidence indicating the plaintiff's precarious financial position, the court exercised its discretionary balancing power under s.357 and declined to order security because the plaintiff had costs awarded in a related winding‑up petition (subject to taxation) and other cross‑debts and practical set‑off considerations meant that ordering security would be unjustified on a broad‑brush assessment; accordingly the defendant's application was dismissed.
4 Nov 2011

HANG FUNG JEWELLERY & GOLDSMITH LTD v. WURTTEMBERGISCHE VERSICHERUNG AG AND OTHERS

Citation

HANG FUNG JEWELLERY & GOLDSMITH LTD v. WURTTEMBERGISCHE VERSICHERUNG AG AND OTHERS
Court

Court of First Instance
Case number

HCA2009/2005

Although the plaintiff may not have ready cash, the court refused to order security because the plaintiff has substantial assets and the character of the business is not 'fly-by-night', the application was made very late with most defendants' costs already incurred and the trial was imminent; therefore, in the exercise of judicial discretion under s.357 and relevant authorities, security for costs was refused.
5 Nov 2009

DOLPHIN ADVERTISING LTD v. TRONKEN ENTERPRISES LTD

Citation

DOLPHIN ADVERTISING LTD v. TRONKEN ENTERPRISES LTD
Court

Court of First Instance
Case number

HCA2409/2006

Defendant did not discharge the burden under Companies Ordinance s.357 to show the plaintiff will be unable to pay costs; the change of registered office was unproved as an evasion and the nominal paid up capital known to the defendant was insufficient to meet the threshold, so the court refused to exercise its discretion to order security for costs.
26 Aug 2008

MAU I BUSINESS CENTRE LTD v. TENFORD HOLDINGS LTD

Citation

MAU I BUSINESS CENTRE LTD v. TENFORD HOLDINGS LTD
Court

District Court
Case number

DCCJ731/2008

The Defendant failed to discharge the burden under s.357 because the evidence showed the Plaintiff had been genuinely carrying on a business since 1995, had a proper registered business address, derived income from licences and claimed significant monthly gross profit; nominal paid-up capital and refusal to produce audited accounts were insufficient to establish that the Plaintiff will be unable to pay the Defendant's costs. Therefore the court lacked jurisdiction under s.357 to order security for costs and the Defendant's application was dismissed.
7 Apr 2008

HUMMINGBIRD MUSIC LTD v. DINO ACCONCI AND ANOTHER

Citation

HUMMINGBIRD MUSIC LTD v. DINO ACCONCI AND ANOTHER
Court

Court of First Instance
Case number

HCA836/2007

The defendants failed to satisfy the threshold that there was credible evidence the plaintiff would be unable to pay costs because the plaintiff is backed by the Chang family who on the evidence will continue funding; additionally the application was late and, on discretionary balancing (including the intertwined counterclaim), security should not be ordered; accordingly the summons for security for costs was dismissed.
12 Apr 2006

SUN-IOMS MAINTENANCE LTD. AND ANOTHER v. SHI KAI BIU AND OTHERS

Citation

SUN-IOMS MAINTENANCE LTD. AND ANOTHER v. SHI KAI BIU AND OTHERS
Court

Court of First Instance
Case number

HCA1278/2002

The court allowed the appeal and set aside the dismissal because the plaintiffs’ default was not intentional or contumelious, delay was excusable, there was no abuse of process and limitation had not expired; however, having regard to the plaintiffs’ uncertain future finances and the insufficiency of the 2nd plaintiff’s undertaking as sole protection for the 2nd and 3rd defendants, the court ordered security for costs under s.357 Companies Ordinance against the 1st plaintiff in the sum of $600,000, dismissed the 1st defendant’s late application for security and made specified costs orders and…
20 Oct 2005

KJM INDUSTRIES LTD v. JPM RESOURCES (HK) LTD

Citation

KJM INDUSTRIES LTD v. JPM RESOURCES (HK) LTD
Court

Court of Appeal
Case number

CACV144/2005

Even if a case under s.357 is made out, a substantial payment into court of the unanswerable portion of the claim (US$118,534.58) materially secures the defendant for that part and, given the statutory test and the payment, it was wrong to order further security; accordingly the order for security was set aside, costs were awarded to the plaintiff and the paid security was to be repaid to the plaintiff.
15 Oct 2004

CAREWINS DEVELOPMENT (CHINA) LTD v. BRIGHT FORTUNE SHIPPING LTD

Citation

CAREWINS DEVELOPMENT (CHINA) LTD v. BRIGHT FORTUNE SHIPPING LTD
Court

Court of First Instance
Case number

HCCL50/2004

On the evidence the plaintiff's Hong Kong operation was shown to be skeleton and of limited financial means and the plaintiff produced no evidence of assets or bank balances; accordingly there was reason to believe the plaintiff would be unable to pay the defendant's costs if successful in defence, and the court exercised its discretion to order security for costs in the sum of HK$485,000 to be paid into court within 21 days or provided by a first class bank guarantee, with a stay to follow if security is not furnished; costs of the application were awarded to the defendant.
28 Apr 2003

JUNSA DEVELOPMENT LTD v. APPEARANCE ESTATE LTD AND OTHERS

Citation

JUNSA DEVELOPMENT LTD v. APPEARANCE ESTATE LTD AND OTHERS
Court

Court of First Instance
Case number

HCA9036/1998

The prerequisite under s.357 was satisfied because Junsa is an impecunious shell company with no assets; there was no clear high probability of success to preclude ordering security; Junsa's inability to provide funds resulted from shareholder unwillingness and the principal's financial state not from defendants' alleged past misconduct; unwillingness of backers is not a valid ground to resist security; third party defendants are entitled to apply for security in respect of their independent liabilities; accordingly the master's orders for security (Appearance HK$850,000; Vigers and Mr Fong H…