Hong Kong Case Law: Decisions & Judgments

Topic

Section 357 companies ordinance

Legal area

Court

5 Jun 2012

SUN FOCUS INVESTMENT LTD v. TANG SHING BOR AND ANOTHER

Citation

SUN FOCUS INVESTMENT LTD v. TANG SHING BOR AND ANOTHER
Court

Court of First Instance
Case number

HCA538/2007

The court exercised its discretion to order security for costs but limited the order to costs which may be incurred in relation to the current security for costs applications and the Amendment Summons because it would be premature and inappropriate to order security for the entire action before leave to amend and the s.26 limitation issue are resolved; the appropriate quantum of security was fixed at HK$360,000 and proceedings are stayed until security is given subject to enumerated exceptions.
6 Dec 2011

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

Leave to re-amend was refused because the proposed amendments would introduce a new cause of action that did not exist at the date of issue of the writ contrary to Hong Kong Court of Appeal authority; P1 was ordered to provide security for defendants' costs under section 357 Cap.32 and Order 23 r.1 because credible evidence and investigative findings justified the inference that the transactions relied upon to show P1's solvency were unreliable or sham and there was reason to believe P1 may be unable to pay defendants' costs.
30 Oct 2009

AKAI HOLDINGS LTD (IN COMPULSORY LIQUIDATION) v. ERNST & YOUNG (A HONG KONG FIRM)

Citation

AKAI HOLDINGS LTD (IN COMPULSORY LIQUIDATION) v. ERNST & YOUNG (A HONG KONG FIRM)
Court

Court of Final Appeal
Case number

FACV10/2009

The appeal is allowed: s.357, read with the definition of "company" in s.2(1), applies only to companies formed and registered under the Ordinance (incorporated in Hong Kong); the context does not require extending the definition to overseas companies registered under Part XI, and it is for the legislature or the Rules Committee (via amendments to the Rules of the High Court) to address any perceived lacunae.
2 Sept 2009

YEE FAT DEVELOPMENT LTD v. WINLINE KNITTING FACTORY LTD

Citation

YEE FAT DEVELOPMENT LTD v. WINLINE KNITTING FACTORY LTD
Court

District Court
Case number

DCCJ447/2007

On the facts there was credible testimony that Yee Fat Development would likely be unable to satisfy an adverse costs order (ceased business, no assets in company name, no other income), Winline's defences and set-off allegations were not frivolous and raised triable issues, and Winline's delay was not so prejudicial as to defeat the application; accordingly security for costs in the sum of HK$250,000 was ordered and proceedings stayed until payment.
23 Apr 2009

AKAI HOLDINGS LTD (IN COMPULSORY LIQUIDATION) v. ERNST & YOUNG (A HONG KONG FIRM)

Citation

AKAI HOLDINGS LTD (IN COMPULSORY LIQUIDATION) v. ERNST & YOUNG (A HONG KONG FIRM)
Court

Court of Appeal
Case number

CACV255/2008

Section 357 is to be given a purposive construction so that it applies to an overseas company which is registered under Part XI and is ordinarily resident in Hong Kong; accordingly the defendant's appeal against the interlocutory decision was allowed and the matter was remitted to Stone J to determine quantum of security. The court did not decide whether s.357 applies to all overseas companies not registered under Part XI.
26 Oct 2007

NATIONBUILD PACIFIC LTD v. FU YIN FINANCIAL INVESTMENT CO LTD

Citation

NATIONBUILD PACIFIC LTD v. FU YIN FINANCIAL INVESTMENT CO LTD
Court

Court of First Instance
Case number

HCA2196/2005

The plaintiffs were shown to be impecunious and the court was not persuaded that ordering security would probably stifle bona fide claims; the court therefore exercised its discretion under s.357 to order security but adopted a broad‑brush assessment of quantum rather than detailed taxation, fixing aggregate security at HK$2,000,000 allocated HK$950,000 (HCA1957/2005), HK$600,000 (HCA2196/2005) and HK$450,000 (HCA886/2007), with 30 days to pay, stays pending payment and dismissal if not paid.
13 Jul 2007

WAI SHUN CONSTRUCTION CO LTD (in Liquidation) v. FITZROYA FINANCE CO LTD

Citation

WAI SHUN CONSTRUCTION CO LTD (in Liquidation) v. FITZROYA FINANCE CO LTD
Court

Court of First Instance
Case number

HCA2051/2004

Plaintiff is in liquidation and expressly impecunious; defendant has an arguable defence based on the Set-Off Agreement and supporting prior judicial findings; plaintiff has not shown an overwhelmingly strong case nor progressed proceedings; accordingly security for costs is necessary and appropriate under s357 to protect defendant's costs and will not improperly stifle a bona fide claim.
23 Aug 2006

DICKSON YOGA CO LTD v. WE ARE ENTERPRISES DEVELOPMENT LTD

Citation

DICKSON YOGA CO LTD v. WE ARE ENTERPRISES DEVELOPMENT LTD
Court

District Court
Case number

DCCJ1132/2006

Defendant failed to adduce credible prima facie evidence that the plaintiff would be unable to pay costs under s.357; furthermore, the overlapping counterclaim and evidence of the plaintiff's recurring income and payment history justified refusal to exercise the court's residual discretion to order security for costs, therefore the summons for security for costs was dismissed.
28 Feb 2006

WINGHING INVESTMENTS LTD v. LEE HOI WING AND OTHERS

Citation

WINGHING INVESTMENTS LTD v. LEE HOI WING AND OTHERS
Court

Court of Appeal
Case number

CACV378/2005

Security for costs in the sum of HK$360,000 was properly ordered against the impecunious plaintiff and the merits of the plaintiff's case could be considered; however the judge erred in ordering that, in default of providing security, the further deposit held by the stakeholder be forfeited and released to the defendants. The Court of Appeal dismissed the appeal but varied the order to remove the forfeiture and release of the further deposit while maintaining the security order and that the claim be dismissed in default and the initial deposit of HK$100,000 forfeited.
1 Dec 2005

SUCCESS WISE LTD v. DYNAMIC (B.V.I.) LTD

Citation

SUCCESS WISE LTD v. DYNAMIC (B.V.I.) LTD
Court

Court of First Instance
Case number

HCA1463/2004

The defendant failed to meet the s.357 threshold because there was insufficient credible evidence that the plaintiff would be unable to pay the defendant's costs (notwithstanding the plaintiff's modest paid up capital), and having regard to the plaintiff's receipt of substantial payments and the absence of evidence of insolvency the court lacked jurisdiction to order security; alternatively, if jurisdiction existed the discretionary factors (notably substantial overlap between claim and counterclaim and that the defendant is effectively an attacker) warranted refusal to order security; accord…