Hong Kong Case Law: Decisions & Judgments

Topic

Third-party funding

Legal area

Court

27 Feb 2023

HYDROTECH WATERPROOFING SOLUTIONS LTD v. SHUN YUEN CONSTRUCTION CO LTD

Citation

[2023] HKCFI 601
Court

Court of First Instance
Case number

HCCT44/2020

The court held that McKee and Mo should not be made personally liable because there was no clear evidence of mala fide conduct or that they acted for their own personal benefit rather than for their companies; however Hop Shing Engineering & Construction Co Limited (HS) was properly joined for costs and ordered to pay jointly and severally with the Plaintiff because evidence showed HS funded the litigation, had a profit-sharing arrangement entitling it to recover about HKD 3,000,000 and therefore stood to benefit and was a real party to the litigation. Consequently the Plaintiffs (including H…
2 Aug 2022

RE SNG ALLAN, also known as SNG HOCK SENG

Citation

[2022] HKCA 1132
Court

Court of Appeal
Case number

CACV465/2018

There was no uncontroverted evidence that Ms Wong personally funded the debtor’s appeal; the only payment identified was a company cheque drawn on GINL’s account signed by her in her capacity as a director with no beneficial interest; accordingly it was not just to hold her liable for the petitioner’s costs and the application for costs against her was dismissed, leaving the debtor liable as previously ordered; costs of the application are to be paid by the debtor on a costs nisi basis to be assessed on a gross sum basis.
2 Sept 2021

HJ INNOXCELL LTD v. TEH BOON KHUAN

Citation

[2021] HKCFI 2604
Court

Court of First Instance
Case number

HCA1707/2018

On the facts the plaintiff demonstrated insufficient means to meet existing assessed costs and gave no convincing evidence of ability to meet future adverse costs; outstanding assessed liabilities exceeded paid-up capital and third-party funders were unwilling to pay adverse costs; accordingly the court exercised its discretion under s905 Companies Ordinance to order security for costs in specified sums payable into court and stayed proceedings until compliance, with liberty to dismiss for non-compliance and summary assessment of the costs of the security applications.
2 Sept 2021

HJ INNOXCELL LTD v. TEH BOON KHUAN

Citation

[2021] HKCFI 2604
Court

Court of First Instance
Case number

HCMP1402/2020

Security for costs was ordered because the plaintiff had unpaid accrued and assessed costs liabilities, insufficient paid‑up capital, no convincing evidence of current or expected ability to meet adverse costs, and third‑party funders were willing to fund pursuit of claims but not settlement of adverse costs; the court concluded the risk to defendants of being unable to recover costs outweighed the risk of stifling a genuine claim and therefore ordered security to the pre‑trial review stage in specified sums and summary assessed costs to be paid.
19 Mar 2018

WADDINGTON LTD v. CHAN CHUN HOO THOMAS AND OTHERS

Citation

[2018] HKCFI 580
Court

Court of First Instance
Case number

HCA3291/2003

Plaintiff failed to establish a prima facie or reasonably arguable case that further disclosure from RSRB would identify a 'real party' who should be targeted for a non-party costs order; the information sought was unlikely to be highly probative and would risk generating satellite litigation. The expert BVI law evidence application was late and there were no exceptional circumstances to admit it. Therefore the court exercised its discretion to refuse additional disclosure and to refuse admission of the expert evidence.
9 Jan 2017

SUPER SPEED LTD (IN LIQUIDATION) v. BANK OF BARODA

Citation

SUPER SPEED LTD (IN LIQUIDATION) v. BANK OF BARODA
Court

Court of Appeal
Case number

CACV184/2014

Security for costs was ordered (HK$280,000 in total for both appeals) because the appellants were impecunious liquidations, the appeals were at best arguable and not strong enough to bar security, there was no justification for using the companies' assets to provide security as that would reduce distributions to creditors, and the funder’s undertaking did not obviate the need for security.
11 Nov 2015

SUPER SPEED LTD (IN LIQUIDATION) v. BANK OF BARODA

Citation

SUPER SPEED LTD (IN LIQUIDATION) v. BANK OF BARODA
Court

Court of First Instance
Case number

HCCW273/2012

Joinder of Grand Tai and the liquidators for costs purposes granted; costs order granted against Grand Tai as the self‑interested funder on the basis of its funding agreement and ability to control/benefit from the litigation; no personal costs order against the joint and several liquidators because their conduct did not demonstrate impropriety or hopelessness and the Bank failed to protect itself by promptly seeking security for costs; accordingly it is not just to make JSL personally liable.
8 Oct 2015

RE COMPANY C

Citation

RE COMPANY C
Court

Court of First Instance
Case number

HCCW637/2006

Leave to enter the proposed funding arrangement was granted because the arrangement was in the interests of creditors, on satisfactory terms, ensured that the liquidators retained control of the litigation, limited the risk of improper influence by the funder, and was pragmatically necessary given the composition of the creditor class; the commercial character of the funder did not, on these facts, render the arrangement contrary to the rules against maintenance and champerty.
8 Oct 2015

RE COMPANY A

Citation

RE COMPANY A
Court

Court of First Instance
Case number

HCCW384/2006

Leave was granted because the proposed funding agreement served the interests of creditors, the liquidators retained control of litigation, the arrangement provided fair allocation to the funder only on success, and the practical difficulties of sourcing funding from dispersed creditors coupled with safeguards meant the commercial character of the funder did not render the agreement champertous in this insolvency context.
8 Oct 2015

RE COMPANY B

Citation

RE COMPANY B
Court

Court of First Instance
Case number

HCCW409/2006

The court granted leave: where liquidators remain in control of litigation, the arrangement is in creditors' interests, and the risks of improper influence by a commercial funder are limited by contractual safeguards, a third-party commercial funding agreement does not infringe maintenance and champerty in the insolvency context; however the court left open whether similar funding for a solvent plaintiff would be permissible.