Hong Kong Case Law: Decisions & Judgments

Topic

Companies ordinance s357

Legal area

Court

15 Apr 2014

CENTURY STAR (ASIA) LTD v. FORTUNE GOLDMAN LTD

Citation

CENTURY STAR (ASIA) LTD v. FORTUNE GOLDMAN LTD
Court

District Court
Case number

DCCJ3380/2011

Threshold under s357 not satisfied: although plaintiff has nominal paid-up capital, it actively holds multiple tenancies and has rental deposits of HK$1,535,000, so there was insufficient basis to believe it will be unable to pay defendant's costs; clause 2(s) governs yielding up and permits deduction for reinstatement costs while clause 4(b)(i) applies to landlord termination during the tenancy and does not support forfeiture on expiry; given plaintiff's strong prospects and that estimated reinstatement costs (~HK$50,000) are far below the HK$450,120 deposit, security for costs was not order…
23 Dec 2013

ARKO SHIP LEASING LTD AND ANOTHER v. WINSMART INTERNATIONAL SHIPPING LTD AND ANOTHER

Citation

ARKO SHIP LEASING LTD AND ANOTHER v. WINSMART INTERNATIONAL SHIPPING LTD AND ANOTHER
Court

Court of First Instance
Case number

HCAJ213/2009

The defendant failed to prove the 1st plaintiff was ordinarily resident outside Hong Kong, and the 2nd defendant's counterclaim constitutes an independent attacking claim such that it would be unjust to order security against the 2nd plaintiff; consequently the summons for security for costs is dismissed as against both plaintiffs and costs are ordered nisi in favour of the 2nd plaintiff against the 2nd defendant.
28 Aug 2012

AMPLE BRIGHT DEVELOPMENT LTD v. TURBO INTERNATIONAL INDUSTRIAL LTD

Citation

AMPLE BRIGHT DEVELOPMENT LTD v. TURBO INTERNATIONAL INDUSTRIAL LTD
Court

Court of First Instance
Case number

HCA928/2011

The Master’s order was upheld because, on the available evidence (absence of updated accounts, closed unattended office, nominal $1 company status and other indicia), there was credible reason to believe Turbo would be unable to pay costs if unsuccessful; Turbo's merits were not shown to be overwhelming, and therefore security for costs in the amount ordered was appropriate.
23 Dec 2008

ASIA-PAC INFRASTRUCTURE DEVELOPMENT LTD AND OTHERS v. SHEARMAN & STERLING (a firm) AND OTHERS

Citation

ASIA-PAC INFRASTRUCTURE DEVELOPMENT LTD AND OTHERS v. SHEARMAN & STERLING (a firm) AND OTHERS
Court

Court of First Instance
Case number

HCA806/2006

On the evidence the court was not satisfied that the 1st plaintiff would be unable to pay costs and therefore security under s357 against the 1st plaintiff was refused; however because the 4th plaintiff's claim is distinct, substantial and might attract costs orders solely against it the court departed from the normal rule protecting foreign co-plaintiffs and ordered security under Order 23 r1 against the 2nd to 4th plaintiffs in the sum of HK$1,000,000 to be provided by payment into court or bank guarantee within 28 days and stayed those plaintiffs' claims until security is provided; master’…
12 Jun 2007

SPECTRUM PLUS LTD AND ANOTHER v. KONICA MINOLTA BUSINESS SOLUTIONS (HK) LTD

Citation

SPECTRUM PLUS LTD AND ANOTHER v. KONICA MINOLTA BUSINESS SOLUTIONS (HK) LTD
Court

Court of First Instance
Case number

HCA10364/2000

The court exercised its discretion to order security for costs against both plaintiffs because the defendant proved on the available evidence that the 1st plaintiff is likely unable to pay (history of unsatisfied judgments, minimal registered capital, lack of accounts and other indicia of being a shell) and the 2nd plaintiff is a foreign BVI company with no assets in jurisdiction; the assignment to the 1st plaintiff was suspicious in motive but not declared void for public policy; merits did not outweigh the defendant's established evidential threshold; quantum to be fixed subsequently (court…
1 Dec 2005

KARPEX (HK) LTD v. YASMINE PRINTING (CHINA) LTD

Citation

KARPEX (HK) LTD v. YASMINE PRINTING (CHINA) LTD
Court

District Court
Case number

DCCJ3902/2004

Where a defendant seeks summary judgment on a counterclaim but the plaintiff has raised a prima facie arguable set-off supported by evidence that the set-off may exceed the counterclaim, the plaintiff must be granted leave to defend and summary judgment is inappropriate; for security for costs under Companies Ordinance s357 the applicant must adduce current, concrete evidence that the company will be unable to pay costs — in the absence of sufficiently current evidence security will be refused. The court applied these principles and refused both the summary judgment and the security order whi…
3 May 2005

SPRITE MASS ENTERPRISES LTD v. LOYAL PROFIT ENTERPRISE LTD

Citation

SPRITE MASS ENTERPRISES LTD v. LOYAL PROFIT ENTERPRISE LTD
Court

Court of First Instance
Case number

HCA1841/2004

Security for costs was ordered because the defendants presented credible evidence (plaintiff's Companies Registry record showing paid-up capital of HK$10,000 and refusal to provide audited accounts) from which it was reasonable to infer the plaintiff may be unable to pay costs; there was no evidence of assets or income and no persuasive reason to exercise discretion against ordering security; quantum fixed at HK$225,000 per action, staged security rejected, and specified costs directions given.
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

HCCL49/2004

The court accepted the defendants' evidence and the plaintiffs' failure to produce evidence of assets or funds to rebut the defendants' case established a prima facie reason to believe the plaintiffs would be unable to pay the defendants' costs; accordingly security for costs was required and, after assessing the size and likely costs of the consolidated actions, the court fixed security at HK$485,000 and ordered payment into court or provision of a first class bank guarantee within 21 days, failing which the actions would be stayed.
4 Dec 2003

EASY WATCH PRODUCTS MANUFACTORY CO LTD v. EPSON PRECISION (HONG KONG) LTD

Citation

EASY WATCH PRODUCTS MANUFACTORY CO LTD v. EPSON PRECISION (HONG KONG) LTD
Court

Court of First Instance
Case number

HCA3943/2002

Plaintiff's limited evidence did not establish it was probable that an order for security would stifle the claim; balancing favoured defendant because plaintiff offered no evidentiary basis about backers' resources; accordingly s357 security was justified and, after reasonable reductions to the defendant's bill and a modest allowance for the counterclaim, additional security of HK$1.4 million (after deducting HK$280,000 already provided) was ordered to cover costs to the end of trial.
16 Jul 2003

UDL HOLDINGS LTD AND ANOTHER v. LEUNG YUET KEUNG AND ANOTHER

Citation

UDL HOLDINGS LTD AND ANOTHER v. LEUNG YUET KEUNG AND ANOTHER
Court

Court of First Instance
Case number

HCA4409/2002

The court held that on proper interpretation of the Scheme 'Accounts Receivables' includes monetary claims in legal proceedings accruing before the Scheme's effective date, so recoveries would be remitted to the Scheme Account making the 1st plaintiff a nominal plaintiff; evidence of adverse audited accounts, auditor's disclaimer and cashflow deterioration established reason to believe the 1st plaintiff would be unable to pay defendants' costs; applying the discretion and balancing test the court ordered security for costs against both plaintiffs limited to the stage of completion of discover…